I have changed my opinion.
Back in Are You Ready? Required Minimum Distribution Follies (Part 1) , I wrote:
About using your IRA/401k custodian company for help.
Some custodians, in addition to helping you calculate your RMD amount, will allow you to set up monthly withdrawals. Namely, they will direct deposit the 1/12 of your RMD amount each month into your bank account. This is a great feature to take advantage of if available.
Changes
However, I have changed my opinion. Suppose the stock market declines early in the year. You have already determined your RMD based on the balance on the prior December 31. If the market declines, your assets decline. As a result, you will be withdrawing your 1/12 per month amount on a reduced balance. This is not a good situation.
A Better Way
I believe that the best course is to withdraw the entire RMD amount as early in January as possible. It should be deposited in an cash-like account such that you use approximately 1/12 of it per month.
Discipline? Bah, humbug!
Of course, that requires some discipline to budget effectively and not squander your funds. But if you were disciplined enough to have retirement saving such that you have enough to RMD each year, you probably have enough discipline not to run out of money in April or May or September.
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