Are You Reinvesting Your RMD as a Retiree? What Do You Need to Know?
Required minimum distributions (RMDs) are mandatory withdrawals that you must take from your tax-advantaged retirement account, like a 401(k) or traditional IRA, beginning at age 73 (or 75 if you were born in 1960 or later). The amount you must withdraw is based on your account balance and life expectancy. In short, RMDs are the government's way of ensuring you pay taxes on contributions made tax-free years earlier, as well as any earnings.Reinvesting your RMD as a retiree can be a strategic financial decision. However, before making any big decisions, make sure you've considered the move from every angle. Here's what you need to know about reinvesting during those critical retirement years.Image source: Getty Images.Continue reading
Required minimum distributions (RMDs) are mandatory withdrawals that you must take from your tax-advantaged retirement account, like a 401(k) or traditional IRA, beginning at age 73 (or 75 if you were born in 1960 or later). The amount you must withdraw is based on your account balance and life expectancy. In short, RMDs are the government's way of ensuring you pay taxes on contributions made tax-free years earlier, as well as any earnings.
Reinvesting your RMD as a retiree can be a strategic financial decision. However, before making any big decisions, make sure you've considered the move from every angle. Here's what you need to know about reinvesting during those critical retirement years.
Image source: Getty Images.
