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Understanding Required Minimum Distributions (RMDs)
Trivia: Which U.S. First Lady had a popular syndicated newspaper column titled “My Day”?
RetireHub
July 07, 2025
Rise and shine, RetireHub community! ☀️ Your Monday newsletter is here!
Today we’re sharing smart tips on understanding required minimum distributions (RMDs), along with the best deals, fun trivia, and more!
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On this day in 2005, a series of coordinated terrorist bombings struck London’s public transportation system during the morning rush hour. Four suicide bombers targeted three Underground trains and a double-decker bus, killing 52 people and injuring more than 700. It marked one of the deadliest attacks in the UK since World War II and led to major changes in security and emergency response systems across Europe. The day is remembered for its tragedy as well as the resilience shown by Londoners in its aftermath.
Understanding Required Minimum Distributions (RMDs)
What retirees need to know about withdrawing from retirement accounts
As you approach retirement, one important financial milestone to prepare for is the Required Minimum Distribution, or RMD. These are mandatory, IRS-regulated withdrawals that must begin from certain retirement accounts once you reach a specific age. While it might sound complex, understanding RMDs can help you avoid costly penalties and better manage your retirement income.
What Are RMDs?
An RMD is the minimum amount you must withdraw each year from tax-deferred retirement accounts like Traditional IRAs, 401(k)s, 403(b)s, and other similar plans. RMDs ensure that the government eventually collects taxes on money that has grown tax-deferred for years. Note: Roth IRAs are exempt from RMDs during the original account holder's lifetime.
When Do RMDs Start?
The age at which you must begin taking RMDs has changed over time:
If you turned 72 before 2023, RMDs began at age 72.
If you turn 73 between 2023 and 2032, your RMDs begin at 73.
Beginning in 2033, the starting age rises to 75.
You must take your first RMD by April 1 of the year following the year you reach your required age. After that, RMDs are due by December 31 each year. Be careful—taking two RMDs in the same year (April and December) can bump up your taxable income.
How Are RMDs Calculated?
RMD amounts are based on your account balance at the end of the previous year and your life expectancy, according to IRS tables. Financial institutions often help calculate this, but the responsibility to take the correct amount falls on you.
For example, if your IRA had a $100,000 balance on December 31, and your IRS life expectancy factor is 25.6, your RMD would be about $3,906 for the year.
Why RMDs Matter
Failing to take an RMD can result in steep penalties. As of 2023, the penalty is 25% of the amount not withdrawn, though it may be reduced to 10% if corrected promptly.
RMDs also affect your tax bill. Since distributions are considered taxable income, they may push you into a higher bracket or affect things like Medicare premiums and Social Security taxation.
Final Tip
Plan ahead! Talk to a financial advisor or tax professional to incorporate RMDs into your retirement income strategy. With a little preparation, you can avoid surprises and make the most of your hard-earned savings.
How do you feel about Required Minimum Distributions (RMDs)? |
Yesterday’s Poll Results: How do you feel about using social media these days?
Most respondents feel positively about social media, with over 60% saying they love it for staying connected and entertained. Another quarter use it occasionally but with boundaries, while a small group is still learning or feels overwhelmed. A few respondents don’t use social media at all, highlighting the range of comfort levels—but overall, the digital connection still holds strong appeal.
TOP COMMENTS
“I like reading the stories, and following everything about autism, latest news, etc...”
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Peace of Mind in Your Pocket: Smart Steps Toward Financial Preparedness
Planning ahead for life’s surprises can offer a real sense of security—especially in retirement. One of the smartest ways to feel more in control is by getting clear on monthly expenses, building a modest emergency fund, and keeping important financial documents organized. Even small actions, like setting up automatic savings or reviewing your insurance coverage, can go a long way toward creating lasting peace of mind.
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Slang Phrase of the Day
Phrase: Glitch in the matrix
Meaning: A “glitch in the Matrix” refers to a strange or unexplainable occurrence that feels like a hiccup in reality—like déjà vu or something oddly out of place. It comes from the 1999 movie The Matrix, where such glitches were clues that the simulated world was malfunctioning.
In a sentence: “I swear I already watered those roses this morning... or did I? Must be another glitch in the Matrix—or just my memory playing hopscotch again!”
Good News of the Day
Purrfect Calm: Virtual Cat Purrs to Soothe Your Stress—and Your Kitty’s Too
Feeling stressed? You’re not alone—and now, you can find comfort in the soothing sounds of a cat’s purr, thanks to Purrli.com. This innovative website offers a customizable virtual cat purring experience, allowing you to adjust the tone and intensity to match your mood. Whether you're seeking relaxation or aiming to calm your feline friend, Purrli provides a digital escape that mimics the calming presence of a real cat.
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RetireHub Trivia
Want more trivia? Play our “Nostalgia Trivia Game” on our site! We add fresh questions daily, so there’s always something new to test your knowledge.
Not into trivia? No worries! We’ve got plenty of other fun games to enjoy, like:
What was the first country to legalize same-sex marriage? |
Which U.S. First Lady had a popular syndicated newspaper column titled “My Day”? |
Which 1990s sitcom character often exclaimed, “Did I do that?” |
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