Older Clients Not Taking RMDs Pay Billions in Unnecessary Taxes: Vanguard
Business Insider••business
Key Points:
- A Vanguard report reveals that many elderly investors are failing to take required minimum distributions (RMDs) from their retirement accounts, leading to significant tax penalties.
- In 2024, 6.7% of Vanguard’s clients of RMD age did not take any withdrawal, with an average missed RMD amount of $11,600, resulting in potential penalties ranging from $1,160 to $2,900.
- Investors with smaller account balances, especially under $5,000, are more likely to miss RMD deadlines, though penalties are highest for those with over $1 million, averaging $8,792.
- Vanguard warns that missing RMDs tends to become a recurring issue, with 55% of
