July 7, 2006, Newsletter Issue #6: Is the Minimum Required Distribution of my 401k Tax Free?

Tip of the Week

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.

About LifeTips

Now one of the top on-line publishers in the world, LifeTips offers tips to millions of monthly visitors. Our mission mission is to make your life smarter, better, faster and wiser. Expert writers earn dough for what they know. And exclusive sponsors in each niche topic help us make-it-all happen.

Not finding the advice and tips you need on this Retirement Planning Tip Site? Request a Tip Now!


Guru Spotlight
Sheri Ann Richerson