Definition

RMDs are mandatory annual withdrawals from tax-deferred accounts like Traditional IRAs and 401(k)s, beginning at age 73 under current rules. The amount is your account balance divided by an IRS life-expectancy factor. Missing an RMD triggers a steep penalty. Roth IRAs have no RMDs during the owner's lifetime.

1. Required Minimum Distributions (RMDs): What They Are and How to Plan for Them

   RMDs force you to withdraw money from pre-tax retirement accounts starting at 73 — and if you ignore them, the penalty is severe. Here is what you need to know and how to manage them strategically.
   retirement

1. Traditional IRA

   An individual retirement account where contributions may be tax-deductible now and taxed at withdrawal.
2. 401(k)

   An employer-sponsored retirement account funded by payroll deductions, often with a company match.
3. Roth Conversion

   Moving money from a pre-tax retirement account into a Roth, paying tax now for tax-free growth later.