This is the perfect moment for retirees to review their investment exposure and – if you will be over 73 this year – to calculate your RMD and plan for withdrawals.

Yes, it’s January – and markets are still near all-time highs. So, it’s tempting to just ignore those year-end statements now arriving in the mail, or available online. That could be your worst mistake of the year, right out of the starting gate.

Calculating RMDs
Although I recently wrote a column about RMDs, this bears repeating because it is so timely.
Your 2026 RMD is calculated based on the value of your retirement account at year-end 2025.

That’s the statement that you are receiving in the mail right now. If you have several IRAs, you should total up the combined year-end value to determine your 2026 RMD.

You can use an online calculator at the website of your plan custodian, or go to www.Calculator.net/rmd. You’ll need your total account value and your age, in order to calculate the amount that must be taken out.

You can take the RMD from each account, or chose to withdraw from one or more of them if you have multiple IRAS. If you have a 40l(k), you must take a separate withdrawal from that account – unless you are still working for that company, in which case you do not have to take an RMD from that account.

You get to choose when to take your RMD, as long as it is completed by year-end. But for the vast majority of people, it makes sense to calculate your RMD in January and take distributions monthly or quarterly. And it makes sense to have income taxes withheld from each distribution. You can set up a plan now to have the money sent automatically to your bank account.

That means you should arrange to have enough liquidity in a money market inside the IRA so you don’t have to sell stocks or funds on a down day in order to facilitate the withdrawal. You’re not “playing” with this money, so consider setting aside a full year’s RMD in a money market fund, ready for automatic distributions.

And here’s a reminder: If you are thinking about doing a full or partial Roth conversion this year, and you’re over 73, you must take this year’s RMD before doing the conversion. Similarly, if you’re rolling over one IRA to another custodian, your RMD must be taken from that account first.

Don’t procrastinate. Set up your 2026 RMD right now!

Review Your IRA Investments
While you have your year-end statements in front of you to do your calculations, you should review your investments. It’s not just “mutual funds”! Each has a different exposure to the stock market. If you don’t know how “risky” your fund is, turn to Morningstar.com for an evaluation.

And you need to list all the funds in separate IRAs to do this evaluation. Likely you’re overlapping in areas exposed to risky tech stocks. Even the broad-based S&P 500 stock index fund is nearly 45% comprised of tech-related stocks. You might not be as diversified as you think you are. And that means more risk if the market falls sharply.

This is your chance to move some money into equity-income funds, dividend funds, or less-correlated sectors such as healthcare or even defense. Again, if you don’t have an advisor you trust, do your homework at Morningstar.com, by searching for the term “portfolio X-Ray.” There’s a 7-day free trial to get you started.

And if you’re simply worried about your overall exposure to the stock market after years of double-digit gains, you can simply trim 20% off the top of each fund and move it to a money market account within your IRA, with no tax considerations. That’s money that lets you sleep at night.

Don’t let your millennial stock broker or financial advisor talk you out of this process. They’ll have years to make up for their own market mistakes. But you’ll be needing your cash to maintain your lifestyle long before that. Trust your instincts. You may miss some more profits – but you might avoid significant losses. And that’s The Savage Truth.