Attention, Seniors: You Have Less Than 1 Month to Avoid This Costly Mistake
There's a reason workers are often encouraged to sock money away for retirement in a tax-advantaged savings plan, like an IRA or 401(k). If you're going to make the effort to build yourself a nest egg, you might as well enjoy some nice tax breaks along the way.
But while saving in an IRA or 401(k) plan makes a lot of sense, these accounts come with certain drawbacks. For one thing, you'll face penalties if you remove funds from one of these plans prior to age 59 1/2 (though some limited exceptions do apply). And while it can be argued that that's a good thing, since it encourages savers to leave their money alone until retirement, it also leaves workers who opt to end their careers in their 50s in a tough spot.
Another disadvantage of keeping your retirement savings in an IRA or 401(k) is that your money can't just sit in your account enjoying tax-advantaged growth forever. Rather, the IRS requires you to start taking withdrawals from your savings starting at age 72. And if you don't follow that rule, you could face enormous penalties.
Source Fool.com
