Like many people, you may spend decades putting money into your IRA and your 401(k) or similar employer-sponsored retirement plan. But eventually you will want to take this money out – if you must start withdrawing some of it. How can you make the best use of these funds?

To begin with, here’s some background: When you turn 70 ½, you need to start withdrawals — called required minimum distributions, or RMDs — from your traditional IRA and your 401(k) or similar employer-sponsored retirement plan, such as a 457(b) or 403(b). (A Roth IRA is not subject to these rules; you can essentially keep your account intact for as long as you like.) You can take more than the RMD, but if you don’t take at least the minimum (which is based on your account balance and your life expectancy), you’ll generally be taxed at 50% of the amount you should have taken – so don’t forget these withdrawals.

This article was written by Edward Jones for use by your local Edward Jones Financial advisor, Michael Lindsey, 101 Wilson Avenue Suite C, Hanover 717-634-2445 michael.lindsey@edwardjones.com

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