RMDs cannot be adjusted mid-year based on portfolio value changes, follow strict guidelines.

From Yahoo Finance: 2025-04-04 23:43:00

Required Minimum Distributions (RMDs) are calculated based on your portfolio’s value and age at the end of the previous year, not during the year. You can’t change RMDs intra-year by taking withdrawals. Your RMD is set at the beginning of the year and must be withdrawn by year-end.

RMDs apply to pre-tax retirement accounts like 401(k)s and traditional IRAs, not Roth accounts or standard investment accounts. The RMD rule mandates a minimum annual withdrawal, starting at age 73 and increasing to 75 by 2033. Each account has its RMD, which must be withdrawn annually until the account is empty.

Penalties for not taking the full RMD amount can be severe, with a 25% tax penalty on the under-withdrawn amount. Correcting errors quickly can reduce the penalty to 10%, and you can appeal to the IRS for a waiver if you made a good faith error. A financial advisor can help navigate these rules and avoid penalties.

You cannot adjust RMDs during the tax year, but you can manage them year-to-year by controlling your portfolio’s value. RMDs are set annually based on your age and portfolio value at the end of the previous year. A financial advisor can assist in creating a retirement plan that accounts for RMDs and other financial considerations.

Despite market fluctuations, you cannot reduce RMDs mid-year even if your portfolio value decreases. RMDs are calculated at the start of the year and must be withdrawn by year-end. A financial advisor can provide guidance on managing RMDs and creating a comprehensive retirement strategy.



Read more at Yahoo Finance: Can I Take My RMDs When My Portfolio Is Down to Make Them Smaller?