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Be Careful: RMDs and Taxes Can Undermine Your Retirement Plans

August 20, 2017

From the Kiplinger Magazine website

Many Americans are in for a major shock when they reach their 70s. They’ve spent nearly their entire lives accumulating money and putting it in their 401(k)s and IRAs. But, when they reach their 70s, retirees face the dilemma of having to take required minimum distributions (RMDs) or else facing a significant tax penalty. Either way, these retirees may face a significant tax burden.

Too much tax deferral is like a pact with the devil. That sounds counterintuitive, especially as most accountants want to maximize your deductions and minimize your current tax liability. They don’t often think about how minimizing your taxes could cost you over the long haul.

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