How Much Is the Required Minimum Distribution (RMD) If You Have $100,000 in Your Retirement Account?
There's plenty to like about retirement accounts like 401(k)s and traditional IRAs. Both types of accounts allow your contributions to reduce your current year's taxable income, giving you an immediate tax break that could save you hundreds or thousands of dollars.The catch, however, is that you're not totally free from paying taxes; you pay on the back end in retirement.In some cases, someone may not need the money in their 401(k) or traditional IRA and can survive in retirement on other sources, such as investments. To avoid a situation where someone skips paying taxes altogether, the IRS enacts required minimum distributions (RMDs), starting the year when you turn 73.Continue reading
There's plenty to like about retirement accounts like 401(k)s and traditional IRAs. Both types of accounts allow your contributions to reduce your current year's taxable income, giving you an immediate tax break that could save you hundreds or thousands of dollars.
The catch, however, is that you're not totally free from paying taxes; you pay on the back end in retirement.
In some cases, someone may not need the money in their 401(k) or traditional IRA and can survive in retirement on other sources, such as investments. To avoid a situation where someone skips paying taxes altogether, the IRS enacts required minimum distributions (RMDs), starting the year when you turn 73.
