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Required Minimum Distributions (RMDs)

Required Minimum Distributions (RMDs) are minimum amounts that a retirement plan account owner (e.g., 401(k) or IRA) must withdraw starting the year that he or she reaches 72 (401(k) RMDs can be deferred if you are still working and not a 5% or greater owner of your employer).

In other words, a retirement plan owner cannot sit on their money forever. They must begin withdrawing a Required Minimum Distribution starting at age 72.