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sephiroth902103
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What many people don't realize is that once they reach 70, the decision to withdraw funds is no longer discretionary. A tax rule mandates you to take out a specified amount annually -- known as a Required Minimum Distribution (RMD) -- by Apr. 1 in the year after you turn 70. This sum is based on a life expectancy formula for you and a spouse who's your beneficiary, and you must pay income tax on it. Failure to withdraw will get you a penalty of 50% of the amount you were supposed to have taken out. (There is no RMD for withdrawals from a Roth IRA, because your contributions to the account have already been taxed.)