How to Coordinate RMDs With Other Retirement Income to Minimize Taxes
As you approach age 73, you should be formulating your RMD plan.
How to Coordinate RMDs With Other Retirement Income to Minimize Taxes
Overview
Anyone who is (sensibly!) socking money away for retirement in tax-advantaged retirement accounts such as IRAs and 401(k)s should learn more about Required Minimum Distributions (RMDs). That's because some forms of these accounts require you to be making certain withdrawals on a certain schedule -- and if you fail to do so, a severe penalty may result.
Specifically, we're required to take RMDs annually from traditional IRAs, SEP IRAs, and SIMPLE IRAs once we reach age 73. (RMDs are not a feature of Roth IRAs and Roth 401(k)s for the original owners of the accounts.)
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Originally published at www.fool.com.
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