Understanding Required Minimum Distributions (RMDs)

What is the primary benefit of contributing to tax-deferred accounts like traditional IRAs?

• Higher interest rates

• Immediate tax deductions

• No withdrawal limits

• Tax-free withdrawals

At what age must you start taking RMDs if you turned 72 before January 1, 2023?

• 72

• 75

• 70 and a half

• 73

What is the penalty for missing an RMD?

• 10% of the RMD amount

• 15% of the RMD amount

• 25% of the RMD amount

• 50% of the RMD amount

Which factor does NOT affect the calculation of your RMD?

• Age

• Account balance

• Beneficiaries

• Investment type

What is one way to avoid the penalty for missing an RMD?

• Ignore the RMD

• Set up recurring distributions

• Transfer funds to a savings account

• Withdraw double the amount next year