Required Minimum Distributions—Pay up! Or Don’t.
By Paul Hynes, CFP®
You're retired, enjoying the freedom, and living the life. If you've also reached the ripe old age of 70, then it's time to pay up—in this case, to the IRS.
If you have any type of retirement account, such as an IRA, you usually have to plan to start taking out at least a minimal amount when you reach age 70. This amount is called the "Required Minimum Distribution," or RMD (or MRD for "Minimum Required Distribution"). The amount you take out will be added to your income for the year, and will likely be taxable. That means you'll be paying your taxes to the IRS and State tax collectors.