KXLY February 24, 2021 8:33 AM Kemberley Washington - Forbes Advisor Posted: Updated: February 27, 2021 4:36 AM Retirement plans offer a host of benefits, from lower taxes to automated saving. But Uncle Sam makes you pay for these benefits, eventually, by requiring you withdraw money from your account whether you need it or not. When you turn 72, required minimum distributions (RMDs) begin for most tax-advantaged retirement plans. In year one, they usually amount to around 3.6% of your account balance, then increase to an average of about 6.5% of your balance. If you skip an RMD, you could be on the hook for an Internal Revenue Service (IRS) penalty equal to 50% of that year’s RMD amount.