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In planning for RMD withdrawals for 2019, I would like some opinions as to the best strategy to take. I don't want us to be in the position of taking withdrawals from mutual funds which are declining in value.
At present our withdrawals are from several IRA's, a 457 and a 401 so several sources for mandatory withdrawals.
I'm thinking that where applicable, to take one withdrawal from a Stable Value Option and the others from bond funds.
Or should it be wise to transfer the entire amount into a cash account at the beginning of the year?
What is the reason for not wanting to take rmds from a declining fund? If you plan on holding the fund you would have some potential tax benefit if it declines after you move it
In planning for RMD withdrawals for 2019, I would like some opinions as to the best strategy to take. I don't want us to be in the position of taking withdrawals from mutual funds which are declining in value.
At present our withdrawals are from several IRA's, a 457 and a 401 so several sources for mandatory withdrawals.
I'm thinking that where applicable, to take one withdrawal from a Stable Value Option and the others from bond funds.
Or should it be wise to transfer the entire amount into a cash account at the beginning of the year?
Why let RMD amounts and timing dictate your portfolio holdings? Your holdings should reflect the entire gamut of your risk and investment strategies. If you are that uncertain about what 2019 may hold, then maybe you consider what your holdings are now and change them accordingly.
By the way, I take RMDs and determine what to cash out on that basis. I have no current plans to change my investment mix in the near future, but I think about a lot. The biggest risk for those of us taking RMDs, which I am sure is your concern, is that the year end balance driving the next year's withdrawals will decline for some reason and you will be forced to withdraw a larger amount from a smaller pie. If I believed that was the probable event, I'd cash out today and buy back everything when the price was much lower. Alas, I don't have that knowledge and have decided to sit tight for the time being.
The biggest risk for those of us taking RMDs, which I am sure is your concern, is that the year end balance driving the next year's withdrawals will decline for some reason and you will be forced to withdraw a larger amount from a smaller pie. .
That's it exactly. Don't want to end up with a smaller pie than I started out with. If the market drops after a good year end amount, then that's what will happen.
I'm frequently seeing discussions as to how to withdraw RMD's--- monthly, quarterly, lump at year end, or at beginning of year----but what I don't see discussed is what category of fund to withdraw from.
That's it exactly. Don't want to end up with a smaller pie than I started out with. If the market drops after a good year end amount, then that's what will happen.
I'm frequently seeing discussions as to how to withdraw RMD's--- monthly, quarterly, lump at year end, or at beginning of year----but what I don't see discussed is what category of fund to withdraw from.
You do know you can move securities right? You don’t have to sell and move cash
I would imagine if you took RMDs and moved them to taxable with the exact same allocation without being out of the market too long you would maintain your same exact relative cost so declining market should not have any effect.
I would imagine if you took RMDs and moved them to taxable with the exact same allocation without being out of the market too long you would maintain your same exact relative cost so declining market should not have any effect.
My broker will move securities from a retirement account to a taxable account so I do not have to sell and buy. It counts toward the RMD's.
I think long term bond funds will decline as interest rates increase. Consider sell some now and putting the cash in CD's and then remove the CD's as needed to meet the RMD's. If you think the market might be down for a couple of years then put that amount of money in CD's. CD's probably need to be cashed in before moving to a taxable account. Check your broker.
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