The 2025 Required Minimum Distribution (RMD) Deadline Draws Near. Should Retirees Make Withdrawals Now or Wait Until December?

Tax-deferred investment accounts, such as traditional IRAs and 401(k) plans, allow workers to save pre-tax dollars (which reduces their taxable income) in the present. In exchange, workers pay income tax on those contributions and any earnings in the future. Withdrawals made too early, meaning before age 59 1/2, are generally subject to a 10% penalty.However, you cannot keep money in tax-deferred accounts indefinitely. They are subject to required minimum distribution (RMD) rules because the federal government must eventually get paid. That means retirees must withdraw a portion of the balance each year after they reach a certain age or else pay an excise tax equivalent to 25% of the amount not withdrawn.RMDs must generally be completed by Dec. 31. The first RMD is the only exception; it can be pushed until April 1 of the following year. But retirees are free to take the mandatory withdrawal at any time within those parameters. Here are the pros and cons of different strategies.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool