Td Mutual Fund RSP - pulling out

For a long time now I was buying into some TD mutual funds, and I stopped last year. Wealth of knowledge on this forum and I've learned the general consensus it to avoid the dead end bank options and get into something that can actually benefit me. There is currently $20,000 sitting in the account. For whatever reason I can't fully recall, I was told by people around me that the best way to pull those funds out was $4,000 every year due to tax purposes.

I want to move this into something that will give me a better return on my investment. Is this the best course of action to move these funds, or is there another way? Maybe the penalty to remove it all at once to put into something else can be justified?

Thank you all in advance