I'm Taking RMDs, But Don't Need the Money. What Should I Do With It?

Core Points - The IRS mandates required minimum distributions (RMDs) from retirement accounts starting at age 73, impacting tax-advantaged accounts like IRAs and 401(k)s [3][4] - RMDs are calculated based on the account's value and the account holder's age, with specific withdrawal amounts required annually [4][5] - Inherited retirement accounts also have RMDs, which must be withdrawn within a certain timeframe, typically 10 years [6] Group 1: RMD Rules and Requirements - RMDs apply to pre-tax retirement accounts, excluding Roth IRAs and, starting in 2024, Roth 401(k)s [3] - Each qualifying account requires its own minimum withdrawal, meaning multiple accounts lead to multiple RMDs [4] - For example, a $500,000 IRA would require a minimum withdrawal of $18,867 by the end of 2025 [5] Group 2: Managing RMDs - RMDs should not simply be deposited into a checking account; instead, they can be strategically managed for growth [7] - Options for managing RMDs include transferring funds into safer investments like certificates of deposit (CDs) or Treasury bonds to mitigate risk and combat inflation [7]