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International Business Times UK
International Business Times UK
Niloy Chakrabarti

The Costly Retirement Mistake Many Americans Keep Making and Why It Happens Again and Again

IRS Vanguard IRA United States
Retirees lose up to $1.7 billion each year in IRS penalties due to this common year-end mistake. (Credit: Monica Silvestre/Pexels.com)

It is unfair that Americans spend decades saving for retirement through 401(k)s and IRAs, benefiting from tax advantages along the way, only to lose money to the Internal Revenue Service (IRS) penalties for a recurring year-end mistake.

Many are unaware of this crucial financial rule. According to Vanguard, retirees lose up to $1.7 billion (£1.2 billion) annually in tax penalties for failing to take the required minimum distributions (RMDs) once they reach the age of 73.

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