What is the most tax efficient way to withdraw your md r. your Ira’s
I have $500,000 in an IRA I need to withdraw $25,000 out of it this coming tax year. $ 300,000 is in a S&P 500 mutual fund. $200,000 are in CDs earning 5%. What would be the most tax efficient way to withdraw the funds I need.
500 mutual fund and 200,000 is in CDs earning 5%
Terry Says
There is no tax-efficient way to withdraw your RMD. Whatever comes out is taxed as ordinary income.
I think you are asking about “asset allocation” — whether you should have less money in the stock market or in CDs. (By the way, there is no penalty for breaking an IRA CD to make an RMD — even if the CD hasn’t matured yet.)
It’s basically a question of whether at this age (at least 73 if you’re taking RMDs) you want this much exposure to the stock market!!
That depends on whatever assets/investments/cds you might also have outside your IRA. And how well you sleep at night with exposure of your assets to market risk.
