The fourth quarter is an opportune time to take inventory of retirement accounts and review actions such as required minimum distributions (RMDs) and planning strategies before year-end.
Chris Hennessey highlights the key retirement planning topics that require attention by year-end:
- Annual RMDs must be taken from retirement accounts to avoid an IRS penalty.
- If an investor does not need the income from an RMD, consider directing it to a charity tax free* or funding a 529 college saving plan for a grandchild.
- Convert a traditional IRA to a Roth IRA for tax-efficient planning and explore the use of a loss carryforward to offset income from the Roth conversion.
*Note that the charitable rollover provision expired at the end of 2014 but is included in tax extenders legislation that Congress is likely to pass in December.
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For informational purposes only. Not an investment recommendation.
This information is not meant as tax or legal advice. Please consult with the appropriate tax or legal professional regarding your particular circumstances before making any investment decisions. Putnam does not provide tax or legal advice.
