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When you reach the age of 70 ½ years old, you must take the required minimum distributions on your 401k plan. This money is taxable and must be reported as income when filing that year's Federal tax returns. Your Minimum Required Distributions may also be subject to state taxes as well. The minimum required distribution rate is calculated by dividing the adjusted market value of your tax-deferred retirement account as of December 31 of the prior year.
|Jennifer Mathes, Ph.D.|