You can use it for living expenses, opening a new savings account, investing in the market or giving the money away to your family or a worthy cause. The options are unlimited once you withdraw funds from your retirement account. If you need to take RMD or will be taking it soon, start by drawing up a projected budget. You can collect your annual RMD in a lump sum or in parts, perhaps in monthly or quarterly payments.
However, delaying the RMD until the end of the year gives your money more time to increase deferred taxes. Either way, make sure to withdraw the full amount before the deadline. For example, if you have an IRA lower than your total RMD, you can empty the small IRA and take the rest of the RMD from a larger IRA. If you have multiple IRAs, you must calculate the RMD for each account, but you can deduct the total RMD from a single IRA or from any combination of IRAs.
Either way, once you've determined the right amount for each year, you can choose to accept your RMD distributions yourself. With the “RMD” solution, you can ask your IRA depositary to withhold enough money from your RMD to pay your full tax bill on all of your income sources for the year. However, reducing the balance of a traditional IRA reduces your future RMDs, and the money from the Roth IRA can stay in place as long as you want.