At age 70 ½, you are required to begin taking mandatory distributions from your retirement account even if you’re still working which will subject you to additional taxation as well as deplete your tax-favored earning power and your savings along with it. If you intend to stay employed beyond the age of 70 ½, however, IRS Publication 590 may offer a solution. Provided you’re still employed, you are allowed to continue making salary deferrals to your 401(k) and your employer is still required to make contributions to your plan. This strategy can work toward offsetting your taxable income which includes your required minimum distribution, reduce your annual tax liability, and add to the compounded growth rate of your money.
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