2019 RMD value to be taken in 2020
I am 73 and have been taking RMD funds for several years. I take them from my 401k and IRAs.
If the value of the investments in the 401k drop below the declared 2019 YE value, would there be a revaluation of the RMD? Example with easy math figures only: The 401k at 12/31/2019 has a value of $400,000 and the RMD value for age 73 was declared to $15,625.00. If the value ofnthen401k drops to $300,000 in November, 2020 and I need to take the RMD . Must I take the $15,625.00 (based on $400k) or a new one of $11,718.75 (based on $300k)? I constantly see predictions of a substantial drop based upon the long time bull market, coronovirus, and the election volatility.
Terry Says
Good question. Only once before, in 2008-2009 did the government make an exception for RMDs taken when the market collapsed after year end. But for now, you should plan to keep your year-end statements from the previous year, and then calculate the RMD based on that year-end value — EVEN IF the value of your account has dropped during the year because of a bear market. That is why I have recommended that those people who must take RMDs have at least 3 years of liquidity in their accounts, so they aren’t forced to sell at a bad time.
