At some point, you’ll need to take money out of your IRA and 401(k). What should you know about these mandatory withdrawals?

First, they’re called required minimum distributions, or RMDs. And you must start taking them when you’re 73, or, if you were born in 1960 or later, 75.

RMDs apply to your traditional IRA and 401(k), but not your Roth IRA or Roth 401(k).

The amount you take out is based on your account balance and age. But if you don’t take out the required amount each year, you could face a 25% penalty.

Of course, you can withdraw more than the RMDs each year, but keep in mind that your withdrawals are taxable.

When you inherit an IRA or 401(k), you still must take RMDs, but you typically must take out all the money within 10 years.

After you’ve started taking RMDs, you must do so by the end of each year, so, if you haven’t taken them for 2024, you may need to act quickly. And if you’ll soon be required to take RMDs, learn as much as you can about them — you’ll want to make the right moves at the right time.

This content was provided by Edward Jones for use by your local Edward Jones Financial Advisor, Casey Caliva, at Historical 30th & Fern. 

Member SIPC

Address:  2222 Fern St., San Diego CA 92104
Phone:  619-516-2744

Web: www.edwardjones.com/casey-caliva