| What is the Purpose of the Required Minimum Distributions (RMD)?
The purpose of the RMD is to prevent indefinite "postponement of taxation on the funds held in retirement accounts."
Some folks would not take any distributions and the GOVT of course would not be able to derive any revenue as the gain on these retirement accounts would be tax free for ever! Hence, the GOVT has imposed a compulsory required minimum distribution rules to force taxpayers to take some mandatory distributions or else face a stiff penalty!
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