IRAs when you are subject to RMDs and the market drops.
How to handle market drops if you are required to make Required Minimum Distributions. We have TIP bond funds in our IRAs, and plan to use them for RMDs if there is a significant market drop, like this year. Are there better ways to handle this? Have you covered planning for this in your column or books?
Terry Says
For the past 6 months or longer I have been advising building up some cash inside your retirement account so you don’t have to sell assets at a loss when you need $$ for your RMD.
Your RMD will be based on your account balance at the end of 2021 –in other words — much higher!
Now you have only 6 months to figure out what to sell (what might rebound, what might fall further) and to take your withdrawal.
Hint: Late this year, I think many people will face this decision and be forced to sell. Don’t get caught in that downdraft!!
