How do you draw your RMDs each year? (55, pension plan, financial advisor)

[loves2read]

My husband has to take his first round of RMDs this year—
He turned 70 end of Dec but doesn’t want to take two next year

I am trying to get him to tell his financial advisor that he wants to take his draw ASAP—before August—
Since it is based on the Dec 31 accounts’ balances the amount is known
To me it is better to take when the market is up and you are drawing from profits

Just wondered if some people take a monthly deposit into a saving/checking account
If some people take at the end of the year or maybe every quarter

[jlvs2run]

Originally Posted by loves2read

My husband has to take his first round of RMDs this year—
Since it is based on the Dec 31 accounts’ balances the amount is known
To me it is better to take when the market is up and you are drawing from profits

Yes, that's a good way to do it, regardless of what time of year it is.

My account is self directed with Fidelity, so when the market is up, I take the RMD then.

[davebarnes]

Monthly

[johnd393]

I take it in December and hope the account has grown a bit by then.

[ansible90]

I have 3 IRAs. From the larger one, I take payments approximately quarterly... I picked dates that are after the funds pay dividends. The other 2 are smaller so I take one payment per year from each but in different months than the large one. One of those comes just before my property taxes are due. You can set up the RMD payments monthly or quarterly or yearly and pick your dates. All are automatically direct deposited to my checking a count.

[loves2read]

My husband’s smaller account is still a 401K controlled by his former employer
He called and told the personnel director he wanted to take an RMD this yr even though he could push it back into 2020–but that would mean a double RMD
From his conversation I think the company controls WHEN the RMD is made
They have several retired employees but it was small company so not large group of them
Don’t know if it comes as just one RMD or other options available
He needs to call again...

[ansible90]

Originally Posted by loves2read

My husband’s smaller account is still a 401K controlled by his former employer
He called and told the personnel director he wanted to take an RMD this yr even though he could push it back into 2020–but that would mean a double RMD
From his conversation I think the company controls WHEN the RMD is made
They have several retired employees but it was small company so not large group of them
Don’t know if it comes as just one RMD or other options available
He needs to call again...

He can roll the 401k into an IRA at any brokerage house... such as Fidelity or Schwab. Then he can control it. I would not leave a 401k with a small company as they may not be around for the remainder of his retirement years.

[mathjak107]

Originally Posted by ansible90

He can roll the 401k into an IRA at any brokerage house... such as Fidelity or Schwab. Then he can control it. I would not leave a 401k with a small company as they may not be around for the remainder of his retirement years.

i agree .. i had grief when the company i was still with had financial issues , were taken over and closed the 401k prior to being taken over .

since the company stopped paying the custodian fees for the 401k the accounts were liquidated , locked and the court had to go through the process of appointing a custodian to distribute the money ...it took just under a year ... we lost all market gains since the money was liquidated and in nothing as well as access to it . .

[BBCjunkie]

I have four laddered IRA CDs (have never worked for a company that had a 401K or pension plan) of roughly equal size because they were originally just one large CD until a few years ago. They are now all 48 month terms that mature one CD per year in early May.

As each CD matures I take the RMD from that one before either rolling it over (if the current bank is offering the best 48 month rate) or moving it to whatever other bank is offering the best 48 month rate at that time. (As I have mentioned elsewhere, I have no desire to engage in investing again because my risk tolerance is at absolute zero so please no responses telling me how "stupid" I am for keeping my IRA in this kind of vehicle, LOL. That's not what this post is about.)

The May draw works for me because my property tax bill arrives in late December and I have the option of paying the entire thing at once or splitting it in half: 50% due no later than January 10th and the other 50% due no later than May 30th. So the yearly RMD timing in the same month is perfect for knowing that the second half of my taxes will be mostly (although not entirely, because I live in NY ) covered by the RMD each year.

It also ensures that all four IRAs will shrink at about the same rate over time. It's a simple method that works for me.

[jghorton]

I take mine annually. Since your husband is not required to pay taxes on RMD's until the year in which he turns 70-1/2, he can take his initial RMD anytime in 2019. He might double-up on RMD's in a single year, is if he didn't pay his 2019 taxes until April of 2020 ... and then paid his 2020 taxes earlier than April of 2021.