Understanding Required Minimum Distributions (RMD) Rules 

Understanding Required Minimum Distributions (RMD) Rules 
Required Minimum Distributions (RMD) are the funds the IRS requires you to take from your retirement accounts. Hadayeva Sviatlana/Shutterstock
Kent McDill
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When you make a contribution to a traditional Individual Retirement Account or 401(k), the tax liability on the funds you contribute is deferred until you take the money out of the account. That allows you to take full benefit of the interest earned by those accounts.

But, the government is going to get its tax dollars from you at some point, and that occurs when you withdraw funds from your retirement accounts. The IRS imposes Required Minimum Distributions (RMD) from retirement accounts to prevent you from avoiding the taxes owed on those contributions, and to keep you from hoarding cash.

Kent McDill
Kent McDill
Author
Kent McDill has been a professional writer his entire career, spending 20 years as a sportswriter in Chicago before transitioning to business writing. He has written specifically about personal finance since 2013. He has four children and resides in suburban Chicago.
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