Retired baby boomers must see if they need to withdraw money from their IRAs and 401(k)s.
To avoid costly penalties, retirees who are 70-and-a-half and older must take a required minimum distribution every year from traditional IRAs and 401(k)s before Dec. 31. An inherited IRA has this requirement, as well, said Sam Huszczo, owner of SGH Wealth Management in Southfield.
This rule does not apply to Roth IRA accounts.
In some cases, retirees have overlooked that Dec. 31 deadline and created painful tax headaches. Ignoring a required minimum-distribution deadline can trigger a 50% penalty on the amount that was required to be withdrawn.