There are deadlines by which RMDs must be taken; otherwise, the account owner is subject to penalties in addition to taxes—and the penalties are pretty stiff. So this is not something you want to mess around with. (Photo: Shutterstock)
Required minimum distributions, or RMDs, are something that retirees and those who plan to retire need to learn about. Those who don't could be in for some pretty unpleasant—and expensive—surprises.
So what exactly is an RMD? According to the IRS, it's the minimum amount of money you have to withdraw from a retirement account every year. Usually, you have to start taking RMDs from IRAs, SEP IRAs, SIMPLE IRAs or retirement plan accounts when you hit age 70½.
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