economy
What's the minimum you're required to withdraw from a $750,000 retirement account?
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TL;DR
- Required Minimum Distributions (RMDs) apply to traditional IRAs and 401(k)s, starting at age 73.
- The RMD amount is calculated by dividing the prior year-end account balance by an IRS life expectancy factor.
- For a $750,000 balance, RMDs range from approximately $28,302 at age 73 to over $37,000 by age 80.
- RMDs are taxed as ordinary income, which can lead to higher tax brackets, increased tax on Social Security benefits, and higher Medicare premiums.
- A penalty of up to 25% of the shortfall may be imposed for missed RMDs.
- Retirees can consider options like high-yield savings accounts, money market accounts, annuities, or precious metals to manage their retirement funds alongside RMDs.