2 Essential Strategies for Taking Your RMDs

Whether you need to take required minimum distributions to live or find them to be a nuisance, here are some tips to make the most of withdrawing these funds.

A binder with required minimum distributions written on the side sitting on top of some charts.
(Image credit: Getty Images)

Depending on how much you need required minimum distributions to live on, these forced withdrawals from traditional retirement savings accounts, such as 401(k)s and IRAs, are either essential income or a complete nuisance. Lately, Uncle Sam has been giving retirees a reprieve from taking RMDs, first by raising the age that you must take them (from 70½ at the end of 2019 to 72 as of last year) and then waiving them altogether for 2020.

Now that RMDs are back, don't let a lump sum of cash at the beginning or end of the year be your default for how and when to take the money. Instead, investment markets and your need for income should be your guide. Even that requires planning because you should "never have to sell assets in a declining market" to take an RMD, says Howard Hook, a principal and senior wealth adviser with EKS Associates in Princeton, N.J.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Managing Editor, Kiplinger's Retirement Report

Siskos is an old hat with the Kiplinger brand. More than a decade ago, she spent eight years writing about personal finance for Kiplinger's Personal Finance magazine, including a monthly column—Starting Out—that served young adults. That was in her salad days. Now she's turned her attention to an audience she hopes to join in a decade or so: retirees. Siskos is the managing editor for Kiplinger's Retirement Report. In between, she broadened her personal-finance repertoire with real estate and investing stories at Old-House Journal, Investing Daily and U.S. News. She comes to Kiplinger by way of the Newseum, where she worked as an exhibit editor.