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I’m not dealing with RMD’s yet but I have the same question. My plan limits me to 3 withdrawals a year, so I have the same question, do I take one withdrawal or three?
If the assumption is, on average over time, your funds will increase, then it seems better to spread the withdrawals out over the year.
Of course for this year it seems like one withdrawal at the peak in January would have been the right strategy, since it looks like this year will be a flat year.
In the past we took our RMD's at the end of the year to allow our money to grow as much as possible but now are taking monthly withdrawals due to the uncertainty of the stock market.
Right now we take it monthly. Fidelity figures out the amount and withholding taxes, they deposit it into my Chase account and it is easy at tax time.
I have heard the argument that taking it at one lump sum in case the market takes a hit.
My thought is that if the market continues to go up, I'm losing money by taking it out at one time.
Wondering how others handle RMD's and their reasoning.
I know it's a crap answer but....it depends. Depends on your retirement plan. Depends on your COL. Depends on your need for cash flow or investment stream.
If you need the money for daily expenses, take it monthly.
If you want to avoid market risk then take it at the start of the year.
My preference is the end of the year with the idea hat the market will be up at the end of the year more offen than down.
Remember if you wait to the end of the year you can always withdraw earlier if you think the market will go down.
I'm getting ready to start my RMD's this year and intend to take them in an annual lump sum. I don't really need the money to live-on and a will likely use it for lump-sum type spending: grandkids college education, travel, vehicles, ministry, etc..
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