@Netteburg wrote:
I don’t have a financial advisor. So I have to make a withdrawal every year?
RMD means "required minimum distribution." The general idea is that retirement accounts like 401(k)s and IRAs were created to support your retirement, and not just to hold funds that you will pass to your kids tax-free when you die. So the rules require that you withdraw at least some money from your account each year after you turn 72-1/2 (there was a recent law change on that.)
The amount is based on the value of the account and your life expectancy. It's around 4-5% of the account balance for most people. You can withdraw more, of course, but if you don't withdraw at least the minimum amount each year, you will pay a 50% penalty on what you should have withdrawn.
The bank or broker that manages your IRA or 401(k) can tell you what your RMD is each year.
