11 Strategies for IRA Withdrawals in Retirement

When you invest in an IRA, 401(k) or other tax-deferred plan, you make a deal with Uncle Sam: You get years of tax-deferred growth, but you have to start taking money out—and give a cut to the IRS—after you turn age 70½.

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When you invest in an IRA, 401(k) or other tax-deferred plan, you make a deal with Uncle Sam: You get years of tax-deferred growth, but you have to start taking money out—and give a cut to the IRS—after you turn age 70½. The calculations can be complicated, and the penalties for missteps are steep: If you don’t take the required minimum distribution by the deadline each year, you’ll pay a penalty of 50% of the amount you should have withdrawn.

The prospect of taking RMDs and facing the tax bill can be daunting, but there are a number of strategies you can use to minimize taxes, make the most of your investments and avoid costly mistakes.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.