How Often Should I Take My RMDs?

The details . . . ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ Dear Reader, Find below a message from our valued sponsor. Please read this important information carefully. - Editor, Anti Communist Zone --------------------------------------------------------------- *|MC_PREVIEW_TEXT|* Is It Better to Take RMDs Monthly or Annually? RMDs are usually taken auually, quarterly or monthly. But which makes the most sense? [Take Retirement Quiz]( Find up to three advisors that serve your area, free! SPONSORED BY SMARTASSET If you have tax-deferred retirement accounts, you'll need to take required minimum distributions (RMDs) eventually. This amount is determined by a number of factors, including your age, account balance and the relative age of your spouse. The IRS requires you to report this distribution on your annual taxes, so it has to happen by the end of each calendar year. Most retirees collect their RMDs either annually, quarterly or monthly. So long as you withdraw the minimum required amount by Dec. 31, the tax implications are unchanged. [But should you take RMDs monthly or annually?]( This important decision can be different for everyone's individual situation. What Are RMDs? RMDs are amounts you're obligated to withdraw from certain tax-advantaged retirement plans, including: - Traditional IRAs - SEP IRAs - SIMPLE IRAs - 401(k) plans - 403(b) plans - 457(b) plans - Profit-sharing plans - Other defined contribution plans Your RMD amount is determined by your age and savings, and taxpayers can calculate it each year using the IRS' Uniform Lifetime Table. Annual Withdrawals: What to Know An annual withdrawal plan means you calculate and withdraw your RMD in one lump sum each year. Your RMD is calculated based on the value of your retirement accounts as of December 31 the year before and using the Uniform Lifetime Table that the IRS releases for each year's tax filings. Many taxpayers who choose to make annual withdrawals do so either at the beginning or end of each tax year and is a personal preference since you can withdraw this money at any time during the calendar year. However, in the first year you qualify for a RMD, you must begin making withdrawals by April 1. For all years afterward, the IRS has no deadline other than the end of the year. Ready to dig deeper into the potential benefits and drawbacks of the annual withdrawal approach? [Learn more here.]( Monthly/Quarterly Withdrawals: What to Know The other common approach to RMDs is taking this money either every month or quarter. As with annual distributions, it's probably a good idea to [speak with a financial advisor]( to see which method could potentially make the most sense for your retirement plan. You can make distributions as frequently as your portfolio allows. However, monthly is the most common approach. [Learn more about the pros and cons of monthly/quarterly RMD withdrawals.]( Is It Better to Take RMDs Monthly or Annually? Ultimately, this choice comes down to what's best for your individual financial situation, as [there are many factors to consider.]( Your money could have the potential for additional growth if you take your entire RMD at the end of each calendar year. However, personal budgeting may be easiest if you take your RMD in 12 monthly portions. Consulting a fiduciary financial advisor could help you determine a plan that factors RMDs and taxes into your overall retirement goals. SmartAsset developed a [free tool]( to match you with up to three vetted fiduciary advisors serving your area, each legally obligated to act in your best interest. It only takes a few minutes, and in many cases you can be connected instantly to compare and decide on an appropriate fit for you. [Get your financial advisor matches today »]( Try SmartAsset's Financial Advisor Matching Tool Get retirement ready. Take this no-cost quiz to get matched with up to 3 vetted financial advisors serving your area. [Get Started]( The information contained in this article is general and not specific to any individual's situation. The SmartAsset quiz matches you with up to 3 financial advisors to which you can compare and decide which to work with. You can consult a financial advisor about your finances and discuss RMDs and how they factor into your retirement. The SmartAsset quiz can't make a determination regarding your RMDs. This is not an offer to buy or sell any security or interest. 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