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Here's my story -- I was taking my beneficiary RMD every year in Jan. My financial advisor said, take it in December, your money will get to grow all year. Then I forgot. The IRS forgave me, but it was a pain in the butt. And now I'm back to taking it in January.

I transfer my RMD from my traditional IRA accounts to a taxable investment account during the first week of January. I have no idea what will happen to the IRA accounts during the distribution year and prefer to minimize the difference between their value on 31 December used to calculate RMD and when I transfer the RMD. I have no taxes withheld from the RMD.

I immediately invest the RMD transferred to the taxable investment account. I don't lose any potential growth that might occur during the distribution year. The RMD grows in the taxable investment account where it receives more favorable tax treatment.

Income from VA Disability Compensation, Social Security Benefits, and two small pensions provides enough money to cover living expenses and estimated income taxes that are paid quarterly.
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