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Mark Miller: Remaking Retirement

Should RMD Rules Be Reformed?

Contributor Mark Miller reviews some of the proposals--and other ideas--for changing the rules for required minimum distributions.

Tax-deferred retirement saving isn't forever. At age 70 1/2, you must start withdrawing funds from 401(k) and IRA accounts. Yet many retirees find the required minimum distribution rules burdensome, and surprisingly large numbers would prefer not to draw down funds at all.

Ideas have been rattling around for a while now to reform the RMD rules, and President Donald Trump signed an executive order on retirement policy in August that included a call to review the formulas used to determine RMD amounts. Meanwhile, the latest tax cut proposal from House GOP leadership (aka Tax Reform 2.0) calls for repeal of RMDs on accounts with $50,000 or less.