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What Do I Need to Know About RMDs (Required Minimum Distributions)

Traditional IRAs (Individual Retirement Arrangements) and other retirement plan contributions can provide a tax benefit annually, allowing you to save regularly for retirement and take distributions when, theoretically, you will be in a lower tax bracket. Required minimum distributions (RMDs) were established to ensure that such retirement investments don't grow tax-deferred indefinitely. There are basically two situations where you may be required to take RMDs from your retirement plan: Either you have reached the age of 70 1/2 or you have inherited an IRA. In the year you turn 70 1/2, you are required to start taking annual RMDs from your retirement plans. The calculations are fairly simpl