Retirees, Should You Take RMDs Early in the Year or Wait?
Retirees must consider the timing of their required minimum distributions (RMDs) to maximize their savings. Taking RMDs early, late, or in installments throughout the year each have pros and cons, including tax-deferred compounding, risk of missing distributions, and regular cash flow.
Retirees must take RMDs from their IRAs each year. There are three timing approaches: taking it early, waiting until year-end, or spacing it throughout the year. Taking RMDs early ensures no penalty and allows for IRA conversion later. Waiting until year-end provides extra tax-deferred compounding. Spacing RMDs throughout the year helps ensure regular cash flow and a range of prices for assets sold.
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