If you’re nearing your retirement date, it’s a good idea to learn the rules about taking required minimum distributions (RMDs) from individual retirement accounts (IRAs) and 401(k) plans.
- Your first RMD generally will be due by April 1 of the year after you reach age 70 1/2.
- Another RMD will be due by December 31 of that same year and then each subsequent year.
- If you miss taking an RMD, the penalty will be 50% of the amount you should have taken but didn’t.
- You can withdraw more than the minimum amount.
- Your withdrawals will generally be taxable at your ordinary income tax rates.
For more information about RMDs, talk to your financial professional.