WGN today. Your RMD put in cash.
Hi Terry, Where did you say we could read about your strategy of putting 4 years of RMD distribution into cash m i think this is a brillant idea. Thank you
Terry Says
I mentioned that people who are currently, or soon will be, subject to RMDs (at age 73) might not want to face the emotional choice of selling funds in a potential market decline. So, if that describes you, (it does describe me!) the idea is to sell some (not all) of your stock funds right now — and MOVE THE MONEY INTO A MONEY MARKET FUND INSIDE YOUR IRA. It will be sitting there, earning very little, waiting for your distribution.
There is no tax incurred, as long as you leave the money INSIDE your IRA. And when those distributions are taken, the withdrawals are taxed as ordinary income.
Of course, if you are still in your old 40l(k) plan, there is probably not a money market fund alternative, since these plans are designed for younger workers to grow their money over the long run. That’s why I advocate in most cases, doing a rollover to an IRA rollover account. Read this column for instructions.
