Ask Terry Questions RMD reinvestment

RMD reinvestment

By Terry Savage on October 29, 2017 | Financial Planning / Retirement

I am 70 1/2 and required to begin withdrawing from my IRAs. I have a pension, have no debts, and do not, at this time, need the RMD funds. I do not have long term health insurance and, although in good health, am conerned with the future. Therefore, I would like to continue to invest the funds for some growth, but do not want to risk losing money. Advice?

Terry Says

Well, first you MUST take that required minimum distribution.  Make sure you include all your IRAs in the calculation --- although you can take the money from any one, or a combination of the accounts.  Most IRA custodians will do the calculation for you, if you give them the balances at year-end in all your accounts.  (You need the balances from LAST year-end, so start keeping track of those statements for this purpose every year.) The next question is what to do with the money, assuming you don't want to spend it.  This requires some thought about how much risk you really want to take.  There's nothing wrong with keeping a pool of liquid assets ("chicken money") in a bank money market deposit account.   Use a fee-only financial advisor to review your asset allocation -- both inside and outside your retirement plan.  Remember, the stock market might not look risky now, after years of regular gains.  But it sure will look risky in a bear market once you are retired!



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