4. Understand how 401(k) rules are different
If you have several 401(k) accounts, you have to calculate and withdraw RMDs separately for each 401(k). You even have to take RMDs from Roth 401(k), although those withdrawals are not taxable. You can't take 401(k) account RMDs from your IRAs and vice versa.
If you are still working at 70.5, you may be able to delay taking your RMD from your current employer's 401(k) until April 1 of the year after you stop working (unless you own more than 5% of the company). But you still have to take RMDs from traditional IRAs and former employer's 401(k)s. If your current employer allows it, you may want to roll funds from other 401(k)s into your current plan and avoid taking RMDs on that money while you are still working.
5. Choose the right investments to withdraw
Some IRA or 401(k) administrators automatically withdraw RMDs proportionately from each of your investments, and they could sell stocks or funds at a loss to make your payment. If you want to avoid that, you can usually elect to take a fixed percentage from each of your investments or have 100% taken from cash.
6. Automate your RMDs
If you want to simplify the process and not worrying about missing deadlines, most IRA administrators will let you automate your RMDs, you can sign up to have the money withdrawn every month or quarter, or by a certain date each year.
7. Donate to charity and get a tax break
After you turn 70.5, you can transfer up to $100K directly from your IRA to charity each year which counts toward your RMD but isn't included in your adjusted gross income. This strategy could be helpful if you itemize your deductions and otherwise won't get a tax break for your charitable gifts.
Keep reading the next 3 strategies here.