As you likely know, if you have an IRA or other tax-deferred retirement account, you must take required minimum distributions (RMDs) when you reach a certain age.

What’s an RMD?

Lawmakers don’t want you to use traditional IRAs and other tax-deferred retirement accounts as estate planning devices to pass substantial money and other assets to your heirs tax-free.

The legislative purpose of a tax-deferred retirement account is to provide funds for your retirement while you are still alive. This is why lawmakers created this type of account. They want you to spend the money while you’re alive.

To help nudge you along this path, the tax code requires you to withdraw a minimum amount from your retirement accounts each year—an RMD—the income from which is taxable to you.

Your annual RMD amount is based on your age and retirement account balance on December 31 ... Log in to view full article.