THE IRS AND MY 401K

When I talked to my friend, Jane, today she told me to call the IRS immediately as they could take 50% of my retirement. “Oh no,” I said and at the same time thanked her for letting me know. Last summer I turned 71 and ½. I knew that the IRS required retirees to start withdrawing money from their IRA’s at that age, but I didn’t think I had any IRA’s.

Sure I had investments, but I didn’t realize the money in the TIAA-Creff account that I had accumulated while I worked at the University was, in fact, a retirement account. I have several investments and the only one I considered as a retirement one is the Roth IRA I have with Vanguard which does not require withdrawals.

So, my 71st birthday came and went and I did nothing. Chances are TIAA-Creff probably sent me a letter explaining I had to make a withdrawal. However, I receive so much “junk mail” from them, that I pay little attention to it. I know… My fault. But it’s spilt milk now.

Of course, I did as Jane suggested and called TIAA-Creff. Luckily they were very helpful and assisted me in taking care of the problem. When I asked about the 50% that the IRS could take, they told me, “Yes, if I get audited, the IRS will take ½ of the money I should have withdrawn.” Oh well, what can I do and if I’m lucky, they will just ignore the ‘small’ amount. But what really frustrated me was that although, the law states the money should be withdrawn when you turn 70 and ½, they give you about 9 months to pay it. For me the deadline fell on April 1, 2012. And what a shame, I called TIAA-Creff on April 20th. If only I had called three weeks earlier!!!!

By Hannah www.FunnyPhotosContest.com a photo contest for cute or funny photos and photo captions and www.EndTheAfghanWar.com .