It seems like when you get to retirement you should be able to take it easy.
Your money is in a tax-advantaged account, and you can take out money as you need. No reason to fuss about it.
Unfortunately, this isn’t always the case.
While you might think that you can put off withdrawing money from your tax-advantaged account if you have income from other sources, this isn’t true if your account is subject to required minimum distributions (RMDs).
What are RMDs (Required Minimum Distributions)?
The RMD is a required amount that you are forced to take from certain tax-advantaged retirement accounts — even if you don’t need the money.
If you don’t take your RMD when you are supposed to, you can be charged penalties that can reduce the value of your retirement account.
RMDs are not required for Roth IRAs. However, other retirement accounts come with RMDs. This means your Traditional IRA, and other non-Roth IRAs are subject to RMDs. Additionally, all 401(k) and 403(b) accounts are subject to RMDs.