Shifting gears into retirement can be a rewarding time. All the years of hard work and saving are really about to pay off. But Uncle Sam could be around the corner to take a chunk out of what you’ve earned. It’s important then to make some moves before you retire in order to avoid a huge hit. So let’s explore some options.
Be Aware of Required Minimum Distributions
If you have a traditional 401(k), 403(b), or individual retirement account (IRA), you’d be required to start taking required minimum distributions (RMDs) after reaching a certain age and every year afterward.An RMD is a certain amount of money you must withdraw from these and other eligible accounts. It’s calculated by dividing the account’s previous year end balance by a life expectancy factor determined by Internal Revenue Service tables.
