As you approach retirement, one of the most important tasks is managing the distributions from your retirement accounts. While saving and contributing to your accounts is a crucial first step, knowing when and how to withdraw from them is equally essential for maintaining financial stability in retirement. A key factor in managing these withdrawals is understanding the rules surrounding Required Minimum Distributions (RMDs).
Required Minimum Distributions (RMDs)
Once you reach a certain age, the IRS requires you to start taking minimum distributions from your retirement accounts, including traditional IRAs, SIMPLE IRAs, SEP IRAs, 401(k) plans, and more. You must begin withdrawing from these accounts when you turn 72 (or 73 if you reach age 72 after December 31, 2022). This IRS resource provides a comprehensive guide on how to calculate your RMDs, when you’re required to start, and the penalties for failing to withdraw the required amounts. It also explains the differences between various types of accounts and how RMD rules apply to them, including Roth IRAs, which have different requirements. Understanding these rules is crucial to avoid hefty penalties and ensure your retirement income is managed efficiently.
Retirement Topics – Required Minimum Distributions (RMDs) | IRS.gov
