RMD

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Topic Author
rockylou
Posts: 171
Joined: Sat Feb 23, 2013 3:31 pm

RMD

Post by rockylou »

I have to take first RMD this year and unfortunately waited until now. With my husband’s RMD we will need to take out total of $50,000. Our IRAs are about 52% total bond fund and 48% total stock fund. Any suggestions which fund should withdraw from? Originally planned to withdraw from stock fund but with market the way it is now not sure what to do, thanks for any suggestions
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retiredjg
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Re: RMD

Post by retiredjg »

Most people have some kind of target asset allocation (stock to bond ratio) for their portfolio. You would withdraw from whichever you have "too much" of.

Stocks have probably gone down more than bonds - it is likely the bond side that needs a withdrawal. But you should check.
Topic Author
rockylou
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Joined: Sat Feb 23, 2013 3:31 pm

Re: RMD

Post by rockylou »

Thanks, good point. I had decided on 50/50 awhile ago but the stocks had gone way last few years so it was closer to 60/40 and I had not moved funds but I guess I could now withdraw from bond fund to get to 50/50, just wish I had rebalanced in January
MRinvestor
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Re: RMD

Post by MRinvestor »

Sorry to hear that you need to sell any stock or bond investments to make your RMD right now.

For what it's worth, and for your future planning, what I do is to keep a cash reserve in each of my pre-tax accounts (IRAs at this point) to cover my expected RMDs for 2 years in the hopes that by doing so I will not have to sell investments in a down market. That approach is turning out to be a good thing this year and I suggest considering it for future RMD planning once the market has recovered a bit.
RetiredAL
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Re: RMD

Post by RetiredAL »

retiredjg wrote: Sat Sep 24, 2022 6:00 pm Most people have some kind of target asset allocation (stock to bond ratio) for their portfolio. You would withdraw from whichever you have "too much" of.
I use the RMD withdrawal to re-balance the source IRA.
billfromct
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Joined: Tue Dec 03, 2013 8:05 am

Re: RMD

Post by billfromct »

My rollover IRA allocation is 65%/35%, with the fixed income allocation about 60% intermediate/40% short term. The RMD is automatically pulled out in early January from the Short Term Bond Fund. So the 2022 RMD was taken out back January 2022. I would rather be lucky than smart sometimes since my RMD was taken out at the height of the bond market in early January; again, lucky!

When I converted to the Brokerage Account a few weeks ago, the automatic RMD feature was taken down & I have to reestablish that function. I tried to do so from directions from the Vanguard email I got, but it keeps taking me in circles so I will have to call Vanguard to do so. I will wait until things quiet down & try in a month or so.

My point is to have Vanguard automatically transfer the RMD out your fixed income allocation (MM Fund, short term or intermediate term bond fund) in January to get out of the way so if something happens to you, the RMD is done for the year.

bill
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22twain
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Re: RMD

Post by 22twain »

Are you going to spend the money or re-invest it for later (or for your heirs)?

If you're going to reinvest it, I would take it from stocks, then reinvest it in taxable, in stocks. This would keep your overall asset allocation the same, but make your IRA more bond-heavy. thereby slowing its future growth and RMDs.
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delamer
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Re: RMD

Post by delamer »

22twain wrote: Sat Sep 24, 2022 9:48 pm Are you going to spend the money or re-invest it for later (or for your heirs)?

If you're going to reinvest it, I would take it from stocks, then reinvest it in taxable, in stocks. This would keep your overall asset allocation the same, but make your IRA more bond-heavy. thereby slowing its future growth and RMDs.
Agreed.

You might even be able to do an in-kind transfer.
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Topic Author
rockylou
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Joined: Sat Feb 23, 2013 3:31 pm

Re: RMD

Post by rockylou »

Thanks i may do that!
Swansea
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Re: RMD

Post by Swansea »

22twain wrote: Sat Sep 24, 2022 9:48 pm Are you going to spend the money or re-invest it for later (or for your heirs)?

If you're going to reinvest it, I would take it from stocks, then reinvest it in taxable, in stocks. This would keep your overall asset allocation the same, but make your IRA more bond-heavy. thereby slowing its future growth and RMDs.
I second this approach.
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tennisplyr
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Re: RMD

Post by tennisplyr »

Personally, I treat it like like a regular withdrawal with an eye towards maintaining my target AA.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
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