(This article originally appeared on Huffington Post 50.)
Boomers will be reaching yet another milestone on July 1: That’s when the oldest ones will begin to turn 70 ½ — the magical age when the Internal Revenue Service (IRS) says they have to start withdrawing money from their tax-deferred retirement accounts — their IRA, workplace 401(k) and self-employed retirement plans.
And if this generation of protesters and anti-government activists don’t like ‘dem apples, the IRS is poised to simply swoop down and take half of their annual distribution anyway.
It’s no secret why the IRS is chomping at the bit. For years, boomers’ money has sat in these retirement accounts, tantalizingly out of the IRS’ reach as they accrued tax-deferred earnings.
When retirees reach 70 ½, the IRS sends the bill on those holdings; it’s known as theRequired Minimum Distribution or RMD and it symbolizes the cracking open of the retirement nest egg — sometimes whether you are ready or not.
Here is a short course on what will happen: