When Should You Take Your RMD? Timing Strategies for Retirees

By Madison Bennett, CFP®, CFT-I™

Required minimum distributions are one of those retirement realities most people understand in theory long before they have to deal with them in practice. You know they’re coming, and you know they need to be factored into your broader financial planning. You also know missing one carries a stiff penalty, up to 25% of the amount you should have withdrawn. But once you’re actually subject to them, a new question comes up: 

When during the year should I take it?

The IRS sets the deadline (December 31 for most account holders), but it doesn’t tell you whether to take your RMD in January, spread it across the year, or wait until fall. 

That decision is yours, and making it deliberately—rather than by default—often has tax and cash-flow implications.

Start With Whether You Need the Money

The most practical first question is whether your RMD covers actual living expenses or simply satisfies a rule.

For retirees who rely on their RMD as part of their monthly budget, spreading withdrawals across the year can work well. It functions like a paycheck and makes budgeting straightforward.

For retirees who don’t need the funds to live on, the picture changes. The RMD becomes more of an administrative obligation, and the timing question shifts toward tax efficiency rather than cash flow. In those cases, a single annual withdrawal is often simpler to manage, and it preserves more flexibility around when and how the money lands in your taxable income.

The Case for Waiting Until Later in the Year

If you’re not pressed for cash, there’s a reasonable argument for not rushing.

Congress has occasionally made mid-year changes to RMD rules. In past years, legislators have waived certain requirements or altered rules for inherited IRAs partway through the calendar year. 

Retirees who had already taken their distributions by the time those changes were announced had no way to reverse course. Waiting until the second half of the year provides a window to respond to any developments before you act.

This isn’t a reason to procrastinate until December 31; there are real risks in waiting too long, including administrative errors or delays. But taking your RMD in October or November rather than February gives you time to stay informed without cutting it too close.

Using Your RMD for Tax Withholding

One of the more practical uses of an RMD, especially for retirees with multiple income sources like pensions, Social Security, and taxable investments, is to handle annual tax withholding through the distribution itself.

Because the IRS treats withholding as if it were paid evenly throughout the year, the timing of the actual withdrawal doesn’t change its effectiveness for this purpose. 

A retiree who waits until November to take a distribution and withholds a large percentage for federal and state taxes can satisfy their tax obligation just as well as someone who made quarterly estimated payments all year, without the administrative burden of tracking four separate payments.

For retirees in Maryland, Pennsylvania, and Florida, state tax treatment of retirement income varies significantly. 

Maryland taxes most retirement income, though military retirees and some public-sector retirees may qualify for specific exemptions. Pennsylvania exempts most retirement income from state income tax entirely. Florida has no state income tax. 

These differences affect how much of your RMD you may want to withhold and whether state-level withholding is worth coordinating through your IRA administrator.

Qualified Charitable Distributions: A Different Path Entirely

If you’re 70½ or older and you give to charity regularly, consider a qualified charitable distribution (QCD) before you take your RMD the standard way.

A QCD allows you to transfer money directly from your IRA to a qualified charity. The transferred amount counts toward your RMD for the year but is excluded from your taxable income. 

For 2026, the annual QCD limit is $111,000 per person. For a married couple where both spouses are 70½ or older and each has their own IRA, the combined limit is $222,000.

The tax benefit here is straightforward: a standard RMD is included in your taxable income, which can push your Medicare premiums higher, increase the taxability of your Social Security, or affect your eligibility for other income-based thresholds. A QCD avoids those ripple effects entirely, because the distribution never shows up as income on your return.

To preserve the tax benefit, the transfer must go directly from the IRA to the charity. A check made payable to you, even if you later give it to a charity, does not qualify.

Some retirees prefer to make QCDs in a single annual transfer; others spread them across the year to match their normal giving pattern. Either approach works as long as the mechanics are handled correctly.

A Note on Complexity Over Time

RMD amounts change each year based on your December 31 account balance, so monthly or quarterly withdrawal setups require annual updates.

For most retirees, a single annual distribution is administratively simpler. But the right approach depends on your income, your tax situation, and how you’re already managing cash flow throughout the year.

None of this needs to be worked out in isolation. These decisions connect to your broader tax picture, and it’s smart to review annually rather than treating it as a one-time setup.

If you have questions about how your RMD fits into your retirement income plan, this is exactly the kind of conversation our team has with clients each year during their annual review. 

You can reach us at (410) 823-7283, or schedule time through our website.

Frequently Asked Questions

What is the deadline for taking an RMD each year?

The deadline for taking a required minimum distribution is December 31 of the applicable tax year. The one exception applies to your first RMD, which you can delay until April 1 of the year following the year you turn 73, though taking two distributions in one calendar year increases your taxable income for that year.

Does it matter whether I take my RMD early or late in the year?

For most retirees, the timing of an RMD within the year has no direct impact on the amount owed, but it can affect your broader tax picture. Taking your RMD late in the year gives you more time to respond to any mid-year rule changes from Congress, and it allows you to use the distribution for tax withholding as a substitute for quarterly estimated payments. If you rely on the funds for living expenses, spreading withdrawals throughout the year may suit your budget better.

Can I use my RMD to satisfy my estimated tax payments?

Yes. Because the IRS treats tax withholding as if it were paid evenly throughout the year, regardless of when it actually occurred, you can withhold a portion of your RMD for federal and state taxes and avoid making quarterly estimated payments. This works whether you take the distribution in January or December. It’s a commonly used strategy for retirees with multiple income sources, and Financial Consulate regularly helps clients structure their RMD withholding to coordinate with their overall tax plan.

What is a qualified charitable distribution, and how does it affect my RMD?

A qualified charitable distribution (QCD) is a direct transfer from an IRA to a qualified nonprofit. It counts toward your required minimum distribution for the year but is excluded from your taxable income. In 2026, individuals age 70½ or older can transfer up to $111,000 per year through QCDs. The transfer must go directly from the IRA to the charity, if the funds pass through your hands first, the tax benefit is lost.

How do RMDs interact with Medicare premiums?

RMDs are included in your adjusted gross income, which means a larger RMD can push your income above thresholds that trigger higher Medicare Part B and Part D premiums. These surcharges, known as IRMAA, are determined two years in advance based on your reported income. Managing the size and timing of RMDs, including using QCDs to reduce taxable income, is one reason why annual tax planning is a good idea before year-end, not after.

About Madison

Madison Bennet, CFP®, CFT-I™, is a Wealth Advisor at Financial Consulate, where she works directly with clients to help them stay aligned with their long-term financial goals. Her planning work includes tax planning, estate planning, investment planning, and retirement planning.