Excess Accumulation Penalty

AAA

DEFINITION of 'Excess Accumulation Penalty'

The penalty a retirement account owner or the beneficiary of a retirement account must pay when he or she fails to distribute a minimum amount due for a year from the retirement account.

INVESTOPEDIA EXPLAINS 'Excess Accumulation Penalty'

The failure to distribute this amount will result in the individual being subject to an excess accumulation penalty of 50 percent of the amount not distributed from the account. This amount is then owed to the IRS.

RELATED TERMS
  1. Roth IRA

    An individual retirement plan that bears many similarities to ...
  2. Required Minimum Distribution - ...

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  3. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  4. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
Related Articles
  1. Taxes

    Preparing For Retirement Plan RMD Season

    Paying taxes is inevitable - that's why you need to learn about the rules for required minimum distributions.
  2. Retirement

    Health problems caused me to take my RMD after the deadline. Can I appeal my case to the IRS?

    When you missed your required minimum distribution (RMD), you should have sent in a letter of explanation and filed IRS Form 5329 with your tax return. If you did not do so, you will still need ...
  3. Taxes

    Tax-Saving Advice For IRA Holders

    Be informed about benefits and deductions that may apply to you and avoid costly mistakes on your return.
  4. Retirement

    Disclaiming Inherited Plan Assets

    There are some good reasons for choosing not to accept the funds, but be sure you follow the proper process.
  5. Taxes

    6 Important Retirement Plan RMD Rules

    Paying taxes is inevitable - that's why you need to learn about the rules for required minimum distributions.
  6. Savings

    5 Ways To Lose Your Retirement Nest Egg

    These common mistakes can put your savings at risk. Find out how to avoid them.
  7. Retirement

    Tough Times: Should You Dip Into Your Qualified Plan?

    401(k)s, pensions and profit-sharing plans can be a source of cash, but there are consequences to this option.
  8. Retirement

    Will My Pension Impact My Social Security Benefits?

    So you're eligible for a pension, and you're eligible for social security. And the question is, will that pension impact your social security benefit?
  9. Retirement

    Retiring In the Philippines? Try These Top Cities

    Four cities in different regions of the Philippines that offer a range of activities and settings, along with good healthcare and a lively expat community.
  10. Retirement

    Are annuities for seniors only?

    Understand the benefits of investing in annuities at a younger age and how fixed or variable annuities might benefit the investor depending on risk tolerance.

You May Also Like

Hot Definitions
  1. Multiplier Effect

    The expansion of a country's money supply that results from banks being able to lend. The size of the multiplier effect depends ...
  2. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  3. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  4. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  5. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  6. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
Trading Center