Understanding RMDs: Rules, Penalties & Potential Tax Impacts
Required Minimum Distributions (RMDs) can feel intimidating at first, but they don’t have to be!
In this video, we walk through what RMDs are in plain language, why the IRS requires them, and how they fit into your overall retirement planning strategies. We’ll talk about how they work, when you have to start taking them, and how they could impact things like your taxable income, Medicare costs, and future planning options. By understanding the “why” behind the rules, we find it's easier to see RMDs as another part of puzzle when managing your retirement strategy.
𝐇𝐞𝐫𝐞’𝐬 𝐰𝐡𝐚𝐭 𝐰𝐞 𝐜𝐨𝐯𝐞𝐫:
✅ What RMDs Are: Why the IRS requires withdrawals from retirement accounts like IRAs, 401(k)s, and 403(b)s.
✅ When They Start: Updated age rules. Now often age 75 for many people!
✅ Penalties & Deadlines: Why missing an RMD can be costly and how to avoid it.
✅ Tax Impact: How RMDs can push you into higher tax brackets, affect Medicare costs, and trigger additional taxes.
✅ Strategies to Consider: QCDs (qualified charitable distributions), Roth conversions, reinvesting withdrawals, and planning ahead to stay flexible.
RMDs are just one piece of the retirement puzzle, and thinking through them early can help keep surprises to a minimum.
