Is It Better to Take Your RMD Monthly or Annually?

Required minimum distributions (RMDs) don’t have to be taken on a specific monthly schedule. You can generally satisfy an annual RMD through one lump-sum withdrawal or multiple distributions during the year, as long as the full required amount is taken by the applicable deadline. Monthly withdrawals can provide predictable retirement income and reduce the risk of forgetting a year-end distribution, while waiting until later in the year keeps more money invested for longer but also leaves it exposed to market gains and losses. Comparing your cash-flow needs, investments and tax withholding can help you choose an RMD schedule that fits your retirement plan.

Consider working with a financial advisor who can help coordinate RMDs with your broader retirement income plan.

Monthly vs. Annual RMDs at a Glance

You can generally satisfy an annual required minimum distribution through one lump-sum withdrawal or a series of smaller withdrawals during the year. The best schedule depends on a variety of factors. These can include your spending needs, investment strategy, tax withholding and how much automation you want.

Factor	Monthly RMDs	Annual RMD
IRS requirement	Allowed as long as the full RMD is completed by the applicable deadline	Allowed as long as the full RMD is completed by the applicable deadline
Cash flow	Provides regular retirement income throughout the year	Provides one larger lump sum
Risk of missing deadline	Can be lower when withdrawals are automated	Can be higher if the distribution is postponed until late in the year
Money remaining invested	Account balance is reduced gradually	More of the required amount can remain invested until the withdrawal is made
Market exposure	Spreads distributions across different points in the year	Concentrates the distribution at one point in time
Taxable RMD amount	Generally the same annual required amount	Generally the same annual required amount
Tax withholding	Can be spread across multiple distributions	Can potentially be handled through one distribution
Administration	Requires more transactions, although they can often be automated	Requires fewer transactions

Neither schedule automatically produces a better investment or tax result. Taking an RMD later in the year keeps more money invested for longer. On the other hand, that also means the account remains exposed to both market gains and losses. Monthly withdrawals may provide more predictable income and reduce the chance of overlooking the year-end deadline.

Example: Monthly vs. Annual RMD Withdrawals

Suppose a retiree has a $36,000 required minimum distribution for the year. The IRS does not generally require that amount to be taken in one specific installment. That means the retiree could choose among several schedules.

For example, they could take:

$3,000 per month for 12 months.
$9,000 per quarter for four quarters.
One $36,000 annual distribution before the applicable deadline.

Assuming the same $36,000 taxable RMD is ultimately withdrawn during the year, dividing it into monthly payments rather than taking one lump sum generally does not change the total amount of the required distribution. What changes is when the money leaves the retirement account and when it becomes available to spend, save or invest elsewhere.

A monthly schedule could help someone who uses RMDs for regular living expenses. By contrast, a retiree who does not need the money immediately might prefer to leave more of the balance invested until later in the year. That approach provides additional market exposure. However, which means the account could experience either gains or losses before the distribution is taken.

The schedule can also affect how tax withholding is handled. Someone taking monthly distributions could withhold taxes from each payment, while someone taking one annual distribution may choose to handle withholding at that time. The better approach depends on the retiree’s broader income, cash-flow and tax-planning needs.

How Do RMDs Work?

An RMD is the amount of money you must withdraw each year from certain tax-advantaged retirement accounts starting at age 73 (or 75 for people born in 1960 or later). You can take out more than your RMD, but you must withdraw at least this much each year. The amount of your required minimum distribution is determined by your age and savings. Most taxpayers can calculate this amount each year using the IRS Uniform Lifetime Table.

Those who turned 72 in 2022 had until April 1, 2023, to take their first required minimum distributions (RMDs). However, in 2023, this age requirement was pushed back to age 73, which is where it stands today. The SECURE Act initially increased the age requirement for RMDs from 70 ½ to 72 in 2019, and SECURE Act 2.0 increased it again from 72 to 73 (75 for people born in 1960 or later).

The purpose of an RMD is so that the IRS can eventually collect the taxes that it deferred when you made contributions to your pre-tax retirement accounts. It applies to accounts such as 401(k)s, traditional IRAs and almost any other form of retirement account on which you don’t pay taxes. The only significant exceptions are Roth IRAs and other after-tax accounts.

Avoid costly mistakes and use our RMD calculator to help you make sure you’re taking the right amount:

Required Minimum Distribution (RMD) Calculator

Estimate your next RMD using your age, balance and expected returns.

Quickly estimate your RMDs and when to take them

RMD Amount for IRA(s)

$--

RMD Amount for 401(k) #1

$--

RMD Amount for 401(k) #2

$--

About This Calculator

This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.

For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.

^*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.

Assumptions

This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.

This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.

However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.

For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.

This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.

Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.

SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.

You must calculate a required minimum distribution for each retirement account in your name. So if you have three different qualifying retirement accounts, you’ll have to calculate the RMD for all three accounts.

The withdrawal rules differ by account type, though. Traditional IRAs can be aggregated, which means you can take the total RMD from any one or several of your IRAs. However, RMDs from 401(k)s and most other employer plans must be taken separately from each account.

If you fail to withdraw (and pay taxes) on a required minimum distribution, you can be taxed at up to 25% of the required amount. For example, if you were required to withdraw at least $10,000 and didn’t, you can face a tax bill of up to $2,500. This penalty drops to 10% if the RMD is corrected within two years.

You can spend an RMD however you see fit. The government just wants to make sure you eventually pay taxes on this money. The only restriction is that you cannot reinvest it in a tax-advantaged retirement account.

Annual RMD Withdrawals

An older couple discusses, "Is it better to take RMD monthly or annually?"

An annual withdrawal plan means that you calculate and withdraw your required minimum distribution in one lump sum each year. This is a perfectly acceptable approach for accounting purposes since your required minimum distribution is set by a predetermined formula. You’ll calculate it based on the value of your retirement accounts as of December 31 the year before and using either the Uniform Lifetime Table or Table II (Joint Life and Last Survivor Expectancy) that the IRS releases for each year’s tax filings.

So, for example, to calculate your RMD for 2026, you would have to use the value of your retirement accounts as of Dec. 31, 2025, and the IRS table that applies to you.

Most taxpayers who choose to make annual withdrawals do so either at the beginning or at the end of each tax year. This is a matter of personal accounting since you can withdraw this money at any time. The one exception is that in the first year that you qualify for a required minimum distribution, you must begin making these withdrawals by April 1. For all years afterward, the IRS imposes no deadline other than the end of the year.

Whenever you choose to withdraw your minimum distributions, there are pros and cons to the annual approach. The benefits of annual withdrawals can include:

Immediate resolution of your tax obligations: By withdrawing all of your required minimum distributions at once, at the start of the year, you get your tax obligation over with. This assumes you have taxes withheld from your distribution, and that it is the right amount.
Reinvestment opportunities: If you have other strong investments in a brokerage account or a personal business, you can take your minimum distribution and invest it in those opportunities earlier, with more time for growth.
Potentially better growth: Since this is a tax-advantaged account, the sooner you withdraw this money, the sooner you pay taxes on it. By contrast, the longer you leave it alone, the longer it can grow tax-deferred. Withdrawing it all at the end of the year can mean more growth in your retirement account over the long run. This is the biggest advantage of making annual withdrawals.

However, there are some downsides to annual withdrawals, too. Those can include:

Potentially higher estimated taxes: Do you pay taxes quarterly? For example, maybe you own a business or generate self-employment income. You can significantly increase your estimated taxes by taking an early minimum distribution.
Cash flow disruption: Some people need the structure of a regular income for their financial planning purposes. In this case, a lump sum withdrawal isn’t ideal.
Potentially forgetting: If you wait until the end of the year to make your minimum distribution, there’s a chance you’ll forget to do so altogether.
Risk of spending the tax money: When you withdraw money from your retirement account, you must pay taxes on the profits that the account has accrued, as well as on the principal. If you take your RMD early in the year, there’s a risk that you will spend the portion of that money that you will later need to pay taxes. This ultimately depends on how you structure your account, as some retirement accounts will automatically withhold taxes on your behalf.

Should You Try Monthly or Quarterly RMD Withdrawals?

The other common approach to required minimum distributions is for retirees to take this money either every month or every quarter. As with annual distributions, there’s no best way to handle this money. It all comes down to a matter of preference. Some retirees prefer taking a lump sum distribution each year. Others prefer a series of smaller monthly withdrawals.

This isn’t the only option, either. You can make distributions as frequently as your portfolio will allow transfers. However, monthly is the most common approach. The benefits of a monthly or quarterly approach can include:

Cash flow management: Making monthly withdrawals allows you to treat this as regular income. Many retirees prefer this style of cash flow over a lump sum format, as it helps with personal finance and budgeting. This is often the biggest advantage of making monthly or quarterly withdrawals.
Estimated taxes: As with annual withdrawals, if you pay quarterly taxes based on other income, having your required minimum distribution arrive in regular segments can make these estimated taxes easier.
Tax payments: If you make monthly withdrawals, it’s often easier to have your portfolio manager automatically deduct any applicable income taxes so that you don’t have to worry about setting the money aside.

Some potential downsides to a monthly or quarterly approach can include:

Reduced growth: The longer you leave your money in place, the more it can grow. If you take your withdrawals over the year, your portfolio will lose some growth opportunities based on reduced capital.
Potential for miscalculation: This is less of a concern if you work with a professional. But if you withdraw your money in stages (rather than one lump sum), there’s a chance that you’ll miscalculate or otherwise make a mistake in your minimum withdrawal.

Ultimately, this comes down to the choice that’s best for your finances. Your money has the most potential for growth if you take your entire minimum distribution at the end of each calendar year. But personal budgeting may be easiest if you take your minimum distribution in 12 monthly portions.

If you do take your minimum distribution at the end of the calendar year, consider an automatic withdrawal. Even professional brokers can get distracted around the holidays.

Bottom Line

An older couple check their tax-deferred accounts, determining "Is it better to take RMD monthly or annually?"

You can generally take an RMD monthly, quarterly, annually or through another schedule as long as you withdraw the full required amount by the applicable deadline. Monthly withdrawals may work well for retirees who want predictable cash flow or an automated way to satisfy the requirement. Meanwhile, a single annual distribution may appeal to those who prefer fewer transactions or want to leave more of the account invested until later in the year. Neither approach guarantees a better financial result. Market performance, spending needs, tax withholding and the risk of missing the deadline can all affect the decision.

“Retirees from age 72 on will need to take RMDs from their pre-tax retirement accounts, including 401(k)s and traditional IRAs. The timing of withdrawals should address your cash flow needs and help you stay on top of your tax obligations. Depending on market conditions, you may choose a strategy that keeps your money invested longer to maximize growth. And remember, you can adjust your withdrawal cadence from year to year to meet your changing needs,” said Tanza Loudenback, CFP®.

Tanza Loudenback, Certified Financial Planner™ (CFP®), provided the quote used in this article. Please note that Tanza is not a participant in SmartAsset AMP, is not an employee of SmartAsset and has been compensated. The opinion voiced in the quote is for general information only and is not intended to provide specific advice or recommendations.

Tips for Retirement Planning

Will you have enough money to support yourself through retirement? While no one has a crystal ball, a financial advisor can help you assess your income needs in retirement and build a plan to meet them. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area. You can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Getting the RMD right is extremely important. The tax implications for this are huge, with potential liability up to 25% of the entire amount. So, make sure you know how to calculate your required minimum distribution.