The government incentivizes retirement savings in 401(k)s and IRAs by offering tax-free contributions and growth on investments. However, required minimum distributions are imposed on traditional IRAs and 401(k) accounts for those aged 73 or older, leading to income tax on withdrawals. Recent rule changes impact inherited IRAs, exempt Roth 401(k)s from RMDs, and allow for reduced RMDs through qualified charitable distributions. Failure to take an RMD incurs penalties. Utilizing QCDs can benefit retirees by reducing RMDs and tax burdens. Roth 401(k) holders can now avoid RMDs, with catch-up contributions required for high earners starting in 2026.

Read more at Nasdaq: 3 Required Minimum Distribution (RMD) Rule Changes Everyone Must Know Before the End of 2025