Selecting an RMD Date for Annual Automatic Withdrawal

Submitted by John L. on Mon, 2019-11-25 23:43

Fidelity defaults to December 5th for annual automatic RMD distributions if no frequency is indicated under the Distribution Schedule section of the form.

Is there a reason why they choose a date so late in the year? Is it safe to choose, or change to, a date earlier in the year?

Thanks for your time.



Submitted by Alan - IRA critic on Mon, 2019-11-25 23:49

  • Withdrawing late defers taxes longer, and many people also withhold from their RMD distribution rather than paying estimated taxes. Withholding is deemed paid equally throughout the year regardless of when actually paid, so keeping the tax payment longer eliminates a no interest IRS loan while providing more time to generate tax deferred income. Also, this allows more time in which to determine the amount the taxpayer wishes to withhold. 
  • They may allow an earlier date to be chosen, or allow installment distributions. Earlier may be better if you need the funds to pay expenses or are in poor health and want to be sure your RMD is completed.

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