Daily headlines on the country’s fiscal situation, broken tax pledges and the political battle lines being drawn to “solve” the problem are enough to freeze anyone in place–doubly so when it’s the most vulnerable among us.
Couple it with time consuming and often confusing paperwork, and it’s understandable why too many individuals of retirement age forget, delay or simply refuse to take their required minimum distributions, despite the hefty tax implications of not doing so.
“I think about folks who don’t have family members helping them track the RMDs–it’s crazy,” said one frustrated baby boomer. “One place sends my mom multiple forms to fill out in tiny print. The annuity RMDs can’t go automatically into a bank account, so I really worry about her losing the checks.”
She’s not alone. As of Nov. 9, Fidelity reports, nearly two-thirds (65%) of the investment giant’s roughly 500,000 IRA customers who are required to take MRDs for tax year 2012 have not yet taken the full amount. Additionally, 54% have not taken any of their RMD to date for the year.
Confusion over basic RMD rules has been a contributing factor, according to the company. Managing RMDs can be a challenging and confusing process due to the complexity of the calculations and IRS regulations.