Pulling money from your retirement accounts is trickier than you might expect. A misstep with your required minimum distribution can lead to expensive penalties.
Savers typically must start taking out money from their individual retirement accounts once they turn 70½. For 401(k)s and other defined contribution plans, it's either when you turn 70½ or when you stop working at your current job, whichever is later. If you've inherited an IRA, you might also be subject to RMDs, even if you're years away from retirement yourself.
If you fail to take out the required sum, you are subject to a 50 percent penalty on the amount you should have withdrawn.
"You are forced to take that money out, and you have to understand the rules," said Ed Slott, founder of the Ed Slott & Co. accounting firm. "And it's very confusing."