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Rules of the Road

September 01, 2018
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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.