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Investing Specialists

When's the Right Time to Take RMDs?

Where you go for required minimum distributions will usually have a bigger impact than when you go.


For affluent retirees, "right time" and "RMDs" (required minimum distributions), don't belong together in the same sentence.

If you're past age 70 1/2, those withdrawals have to start coming out of your tax-sheltered retirement accounts--traditional IRAs and 401(k)s, as well as Roth 401(k)s--in the year following the year in which you attain age 70 1/2. If you don't take them on schedule--by April 1 of the year following the year you turn 70 1/2 and by year-end of each year thereafter--you'll face a penalty of 50% of the amount you should have taken and didn't. (Plus, you'll still owe ordinary income taxes on the money, as you would with any IRA distribution.)

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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.