IN THE PROFESSION
Required Minimum Distributions MURRAY SAYLOR The Saylor Law Firm LLP msaylor @ saylorlaw . com
R etirement plans of all types , defined contribution plans , defined benefit plans , 401 ( k ) plans , and Individual Retirement Arrangements ( IRAs ) all permit the reduction of taxable income in the year it is earned if it is contributed to a qualified retirement plan . The plan assets are tax exempt . That is a great benefit because the assets will appreciate faster than if the income was taxed annually . Investments that generate taxable income can be directed to these accounts to shelter that income .
Retirement assets may not be distributed out of the accounts without a 10 % penalty prior to a plan participant reaching 59½ years old . Of course , there are exceptions . While the government is patient in collecting tax on retirement savings , payment of the tax is eventually required . Distributions must be made at certain ages . Initially , 70½ was the standard latest date for making distributions . There are many rules related to making the distributions that mare named Required Minimum Distributions ( RMDs ). www . atlantabar . org THE ATLANTA LAWYER 15