Limiting Required Minimum Distribution Costs
The IRS requires that funds be withdrawn from nearly all retirement accounts, including traditional IRAs, 401(k) plans, and SEPs. These withdrawals are known as required minimum distributions, or simply RMDs. Once a retiree turns age 70½, the withdrawals must be made annually. (Roth IRAs are notably exempt from this rule, and a retiree has until April 1 of the year after he turns 70½ to make the first withdrawal.)
The IRS does not specify how you should free up the cash to take the withdrawal, only that you actually take the money out. This lack of specificity provides you with some flexibility to limit transaction costs. This inaugural Retired Investor column discusses portfolio strategies for
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