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Welcome to the introductory segment of our Required Minimum Distributions (RMDs) insight series! In this discussion, we’ll delve into the fundamentals of RMDs, shedding light on their significance and implications for retirees. If you’re envisioning a retirement where you have control over when to tap into your retirement funds, the IRS has a different plan…
RMD, also known as Required Minimum Distribution, is the minimum amount you must begin withdrawing from retirement accounts at age 73. If you reached age 72 before January 1, 2023, however, you may also begin withdrawing a minimum amount from your designated retirement plan accounts. RMD planning will require you to better understand what the process entails and which accounts are affected to determine how you will distribute your withdrawals to best optimize for tax purposes, deductions, and future savings.
Currently, RMD is required for all individuals who have traditional 401k accounts, a standard IRA, or even those who have set up 403(b) savings accounts. The only type of account that RMD does not currently apply to is traditional Roth IRAs while the initial beneficiary is still alive and well.
As you begin comparing retirement account types and plans, you may wonder why RMDs are necessary, especially if you prefer to save for an extended time. For traditional IRA and 401k savings accounts along with 403(b) savings accounts, RMDs are necessary for a variety of reasons, including:
Understanding the basics of RMD planning is crucial for anyone who has a vested interest in a long-term, reliable retirement plan. If you’re thinking of learning more about RMD retirement planning, consider the following:
Are you starting to plan for your retirement, but you’re not sure where you should begin or which retirement plan is right for you? At Pathfinder Retirement, we can help. Learn more about retirement plans by taking our retirement quiz to determine which savings plan and vision is right for you.
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