Excess Accumulation Penalty


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.

BREAKING DOWN '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.

  1. Required Minimum Distribution - ...

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  2. Roth IRA

    An individual retirement plan that bears many similarities to ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  5. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  6. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
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    When you missed your required minimum distribution (RMD), you should have sent in a letter of explanation and filed IRS ... Read Full Answer >>
  2. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  3. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  4. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  5. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
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    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>

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