Excess Accumulation Penalty

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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.

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