Required Minimum Distributions
The IRS wants its share. Here is how it works.
If you have money in a traditional IRA or 401(k), the IRS will eventually require you to start taking withdrawals. These are called Required Minimum Distributions (RMDs). For most people, they begin at age 73. The amount you must withdraw each year is based on your account balance and your life expectancy. If you skip an RMD or take too little, the penalty is steep: 25% of the amount you should have withdrawn.
From Grace
RMDs can feel complicated, but the core idea is simple. Let me help you understand when yours start and roughly how much to expect.