I'm only an ignorant amateur with this stuff, and my simple understanding is that the overall amount of your RMD to be "taken" in 2021 is calculated on the basis of a snapshot of your account value on a certain date - I think ending of 2000. Unless the reg/method changes, the same would be true for the RMD in 2022 - based on value of account at end of 2021.
1. If someone is saying that the date on which one chooses to "take" the RMD during 2021 would affect its amount, I don't understand that idea.
2. If someone is talking about management of the account for balance and effect on earnings during 2021 as we normally try to do in dealing with interest fluctuations - the timing of one "taking" the 2020 based RMD could have effect on the 2021 final snapshot and, thus, the RMD outcome as"taken" in 2022.
Which would it be?
As a person who has had to do RMD withdrawals from retirement accounts for the past 4 years, I know a bit about it-
The amount of an RMD to be taken in any given year, if you are old enough to have to do it, is based upon two things: The value of the retirement account at 12/31 of the previous year, and a divisor, based upon published IRS timetables, that determines the amount of the RMD for the present tax year.
As far as the date the RMD is taken, here is an example: Say your year-end value was $100,000, and the RMD tables says you must take out $5,000, as an example. That number is a fixed value. What is not fixed, however, is the value of that account in the present tax year. It may be higher than the $100K, or it may be lower, due to market fluctuations. Now, if you take out the $5K when the value of your account is, say, $110,000, you are left with $105,000 in that account, to continue to work for you. If, however, the market tanks, as it periodically does, and the value of your account at the time of your RMD is, say, $80,000, you are left with only $75,000 to continue to work for you. That is why it is advantageous to do your best to try to time your withdrawals.
