Tax Advice! Should I Wait To Take RMD?

The question is, I turned 70 in August so ill need to take my first required minimum distribution (RMD) from my 401k by April 1st of 2019. Would I be better off waiting or taking it now? Yes you have until April 1st of the year following the year that you turned 70 to take your first RMD. It may seem like a smart idea to wait until the last possible moment if you don’t need the money. Some good reasons to think this are , not only will your RMD withdrawal be considered taxable income, but, the longer one waits, the longer you can take advantage of the tax deferred growth potential of your retirement account. There is however one good reason to take the first RMD during the calendar year in which you turn 70. You will also have to take your second RMD before the end of 2019. The April 1st rule only applies to the first RMD. So with that, if  you wait as long as possible to take your first one, you will end up taking two RMD’s in the same calendar year. What does this mean? well it means you will have twice the taxable income from retirement accounts This in turn can put you into a higher tax bracket and the result wall be a much higher tax bill that you will have if you take your first RMD before the end of 2108.                                                                                                                                                                                                                                                                                                                              It’s always best to check with your tax professional but a good idea on this is to take RMD’s in separate calendar years.


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