Which Funds to Take RMD From
Which Funds to Take RMD From
I currently have the following $1,000,000 IRA three fund portfolio:
VFSUX Vanguard Short-Term Bond Admiral Shares 35% $350,000
VTSAX Vanguard Total Stock Market Admiral Shares 45% $450,000
VFWAX Vanguard FTSE All-World ex-US Index Admiral 20% $200,000
The original portfolio allocation was 50% bond 35% US Stock market, and 15% all world ex US index fund.
I need to take RMD of $36,497 from the above portfolio. I am 70 years old.
My question:
Is there a calculator, spreadsheet or App that can do the calculation to put me back to my original portfolio allocation and tell me what funds to sell and buy, plus give me the required cash of $36,497 to meet my RMD requirement. Thanks Paul
VFSUX Vanguard Short-Term Bond Admiral Shares 35% $350,000
VTSAX Vanguard Total Stock Market Admiral Shares 45% $450,000
VFWAX Vanguard FTSE All-World ex-US Index Admiral 20% $200,000
The original portfolio allocation was 50% bond 35% US Stock market, and 15% all world ex US index fund.
I need to take RMD of $36,497 from the above portfolio. I am 70 years old.
My question:
Is there a calculator, spreadsheet or App that can do the calculation to put me back to my original portfolio allocation and tell me what funds to sell and buy, plus give me the required cash of $36,497 to meet my RMD requirement. Thanks Paul
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Re: Which Funds to Take RMD From
I sure hope it's not that complicated. I'm two years behind you and I can't do the math.
If it's all in one IRA with Vanguard, I'd call Vanguard and tell them to set up an automatic RMD withdrawal schedule. (You could do that yourself on their web-site; but they like to be helpful and you've got $1 mil. They can do the math.) If they take it all out of one fund - I'm sure there are other options, I'd rebalance back to my chosen asset allocation and I'd be set for another year.
If it's all in one IRA with Vanguard, I'd call Vanguard and tell them to set up an automatic RMD withdrawal schedule. (You could do that yourself on their web-site; but they like to be helpful and you've got $1 mil. They can do the math.) If they take it all out of one fund - I'm sure there are other options, I'd rebalance back to my chosen asset allocation and I'd be set for another year.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Re: Which Funds to Take RMD From
One of the options is to have them distribute it on a pro rata % basis. Based on each fund as a percent to the total IRA. This is what I do
It is possible that as the stocks go up or down you might need to rebalance periodically.
Dan
Also if you wanted to be 50% bonds, you are now 35% bonds at 70. Is this where you want to be at retirement?
It is possible that as the stocks go up or down you might need to rebalance periodically.
Dan
Also if you wanted to be 50% bonds, you are now 35% bonds at 70. Is this where you want to be at retirement?
Dan999
Re: Which Funds to Take RMD From
What makes this somewhat difficult and makes me think there may not be a calculator which would easily make the calculation is that you are trying to do two things at one time. One is to rebalance the portfolio and the second is to take out the RMD. A spreadsheet could be developed to do this but I think it might be easier to do it in two steps. It could be done in either order. I would suggest that if you want to take the RMD first have Vanguard take a proportional distribution from all three funds. After that is done the rebalancing could be done. A quick look makes me think that you will be transferring $ from both of the stock funds into the bond fund.
Bob
Re: Which Funds to Take RMD From
It has been awhile since I used it but Vanguard has a "Portfolio Tester" where you can enter a hypothetical change to each of your holdings and analyze what the change to the asset allocation would be. I go to "Portfolio Watch" and there is a link on the lower right.
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Re: Which Funds to Take RMD From
I am not aware of any calculator or app made specifically for this purpose.
If you wanted to do it all in one set of transactions rather than two:
1) Calculate the post-RMD portfolio size (current size, minus RMD),
2) Calculate the desired amount in each fund (new portfolio size, times desired percentage allocation),
3) Subtract current amount of each holding from desired amount of each holding to find out what you need to do.
This assumes that the IRA is the entire portfolio and that the RMD is being spent as soon as it comes out of the account. If, after taking the RMD, the money will be kept in a taxable account and remain invested, then the question is not one of arithmetic but rather tax planning (i.e., which of your holdings is the most tax-efficient, such that it would be the one you would least mind holding in a taxable account).
If you wanted to do it all in one set of transactions rather than two:
1) Calculate the post-RMD portfolio size (current size, minus RMD),
2) Calculate the desired amount in each fund (new portfolio size, times desired percentage allocation),
3) Subtract current amount of each holding from desired amount of each holding to find out what you need to do.
This assumes that the IRA is the entire portfolio and that the RMD is being spent as soon as it comes out of the account. If, after taking the RMD, the money will be kept in a taxable account and remain invested, then the question is not one of arithmetic but rather tax planning (i.e., which of your holdings is the most tax-efficient, such that it would be the one you would least mind holding in a taxable account).
Mike Piper |
Roth is a name, not an acronym. If you type ROTH, you're just yelling about retirement accounts.
Re: Which Funds to Take RMD From
If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis.
If you are going to spend the RMD, take it from whichever fund is overweighted in your asset allocation, so that you can rebalance inside the IRA.
If you are going to spend the RMD, take it from whichever fund is overweighted in your asset allocation, so that you can rebalance inside the IRA.
Re: Which Funds to Take RMD From
My math says you're looking for:
Total portfolio $1,000,000 - $36500 = $963,5000
VFSUX Vanguard Short-Term Bond Admiral Shares 50% $481,750 (buy $131,750)
VTSAX Vanguard Total Stock Market Admiral Shares 35% $337,225 (sell $112,775)
VFWAX Vanguard FTSE All-World ex-US Index Admiral 15% $144,525 (sell $55,475)
Total portfolio $1,000,000 - $36500 = $963,5000
VFSUX Vanguard Short-Term Bond Admiral Shares 50% $481,750 (buy $131,750)
VTSAX Vanguard Total Stock Market Admiral Shares 35% $337,225 (sell $112,775)
VFWAX Vanguard FTSE All-World ex-US Index Admiral 15% $144,525 (sell $55,475)
Re: Which Funds to Take RMD From
grabiner wrote:If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis.
If you are going to spend the RMD, take it from whichever fund is overweighted in your asset allocation, so that you can rebalance inside the IRA.
All the Best, |
Joe
Re: Which Funds to Take RMD From
[OT comments removed by admin LadyGeek]
Re: Which Funds to Take RMD From
I'd take if from Domestic Stock this year (and I would take it out right away, you don't know what the market will do in the future).
Your bond % may be a bit low for your stage of life, I would continue to take from stock for a few years to decrease the relative % of stocks in your portfolio.
Or you can pro-rate as others have suggested. There is almost no wrong answer.
73
Your bond % may be a bit low for your stage of life, I would continue to take from stock for a few years to decrease the relative % of stocks in your portfolio.
Or you can pro-rate as others have suggested. There is almost no wrong answer.
73
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: Which Funds to Take RMD From
deleted see next post
Last edited by robertalpert on Thu Jul 02, 2015 11:12 pm, edited 2 times in total.
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Re: Which Funds to Take RMD From
Is your portfilio's time horizon for your use only? Consider putting everything into VSCGX ---- Life strategy conservative growth (40% stock; 60% bond) and just withdraw the required minimum distribution each year.
Is your portfolio's time horizon partly for legacy (hiers)? Consider putting half into VSCGX (40% stock; 60% bond) and the other half into VSMGX ---- life strategy moderate growth (60% stock; 40% bond). And draw the required minimum distribution from your (conservative) portion VSCGX.
Is your portfolio's time horizon partly for legacy (hiers)? Consider putting half into VSCGX (40% stock; 60% bond) and the other half into VSMGX ---- life strategy moderate growth (60% stock; 40% bond). And draw the required minimum distribution from your (conservative) portion VSCGX.
Re: Which Funds to Take RMD From
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Re: Which Funds to Take RMD From
Doing this in two steps makes sense to me.
1. Calculate the RMD
2. Rebalance with what's left.
See the wiki: Rebalance
Under "External links," you'll find a calculator that's designed to rebalance your portfolio which works with Vanguard's buy/sell website. Here's a direct link: Rebalancing spreadsheet - it's the 3rd approach ("Rebalance by Desired Funds to Transfer")
Don't ask me why Vanguard can't automatically do the rebalancing online. (They might be able to rebalance your portfolio if you call them.)
1. Calculate the RMD
2. Rebalance with what's left.
See the wiki: Rebalance
Under "External links," you'll find a calculator that's designed to rebalance your portfolio which works with Vanguard's buy/sell website. Here's a direct link: Rebalancing spreadsheet - it's the 3rd approach ("Rebalance by Desired Funds to Transfer")
Don't ask me why Vanguard can't automatically do the rebalancing online. (They might be able to rebalance your portfolio if you call them.)
Re: Which Funds to Take RMD From
Thank you all for your comments, remarks and calculations.
What started me on this journey was an article from Christine Benz called:
For Retirement Cash Flow, All-in-One Investments May Not Fit the Bill
It can be found at:
http://investors.morningstar.com/news/c ... ctCode=mle
Paul
What started me on this journey was an article from Christine Benz called:
For Retirement Cash Flow, All-in-One Investments May Not Fit the Bill
It can be found at:
http://investors.morningstar.com/news/c ... ctCode=mle
Paul
Re: Which Funds to Take RMD From
Vanguard has the RMD proportional allocation set up on line so you can rebalance it yourself the next day after you have set your funds in the proportion you want. I use this tool much too often. As Lady Geek said, Vanguard should automatically rebalance it for you. But they don't.
Caution if you were to close one fund and move the $ out to more than one fund you will not have enough distributed in your next RMD. You need to reallocate the %.
If you switch the entire balance to one new fund, then they will automatically use the old RMD % for the new fund. So you would be ok.
Adjusting the RMD allocation is very easy online and there apparently is no maximum number of times you can do this..
Dan
Caution if you were to close one fund and move the $ out to more than one fund you will not have enough distributed in your next RMD. You need to reallocate the %.
If you switch the entire balance to one new fund, then they will automatically use the old RMD % for the new fund. So you would be ok.
Adjusting the RMD allocation is very easy online and there apparently is no maximum number of times you can do this..
Dan
Dan999
Re: Which Funds to Take RMD From
The easiest, most straightforward approach is what Lady Geek suggests. (a) take your RMD (proportionally from your invested funds), (b) rebalance to your desired proportions.
This works easily if you plan to take your annual RMD in just one transaction. I do this at Fidelity, and have the MRD transferred to a cash management account at Fido, from which I can make cash transfers to my bank if I wish or reinvest at Fido. Of course, you will also be withholding some of your RMD distribution for federal and state taxes, so your net cash will be less than the RMD transfer.
This works easily if you plan to take your annual RMD in just one transaction. I do this at Fidelity, and have the MRD transferred to a cash management account at Fido, from which I can make cash transfers to my bank if I wish or reinvest at Fido. Of course, you will also be withholding some of your RMD distribution for federal and state taxes, so your net cash will be less than the RMD transfer.
Re: Which Funds to Take RMD From
Can someone explain this? Why would stock funds grow tax-free as opposed to bond funds?grabiner wrote: ↑Thu Jul 02, 2015 7:36 pm If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis.
Re: Which Funds to Take RMD From
I'm confused, what taxable account counts towards RMD? Or are you globally rebalancing? I'm just not following. Anyway, I look at these as separate and independent events. Taking out RMD pro rata don't change AA, and rebalancing doesn't involve withdrawals. Location (tax efficient) of investments is the only place these events cross paths, but as long as you have flexibility in the IRA, you can easily make adjustments there.grabiner wrote: ↑Thu Jul 02, 2015 7:36 pm If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis.
If you are going to spend the RMD, take it from whichever fund is overweighted in your asset allocation, so that you can rebalance inside the IRA.
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Re: Which Funds to Take RMD From
If you're not aware, Vanguard offers a free service that will help you "accomplish" your RMDs. I would be surprised if they would not assist in helping you end up with at the desired allocation, as part of their service. Here's a list of frequently asked questions regarding their rmd service:
https://personal.vanguard.com/us/conten ... tent.jsp#f
https://personal.vanguard.com/us/conten ... tent.jsp#f
Re: Which Funds to Take RMD From
Most of increase in value of a stock fund is capital gains (an increase in the value of the companies). This gain is not realized until you sell the fund.5boro wrote: ↑Sat Sep 22, 2018 10:13 amCan someone explain this? Why would stock funds growth tax-free as opposed to bond funds?grabiner wrote: ↑Thu Jul 02, 2015 7:36 pm If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis.
Most of the increase in the value of a Bond fund is interest paid on the bonds. Interest is usually (Muni bonds excepted) taxable when it is distributed - when the dividend is paid.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Which Funds to Take RMD From
Thanks David!
So even if one invests in a vanguard total bond index fund they would have to pay taxes on dividends even before they sell their holdings?
So even if one invests in a vanguard total bond index fund they would have to pay taxes on dividends even before they sell their holdings?
Re: Which Funds to Take RMD From
If you have an RMD you don't need to spend, you don't need to change your asset allocation. If you sell a stock fund in your IRA to make the RMD, and buy a stock fund in your taxable account, you have just as much in stock as you had before. (And it is better to have stock funds in your taxable account if you are wealthy enough that you aren't spending your RMDs; this is why I suggested using a stock fund.)inbox788 wrote: ↑Sat Sep 22, 2018 11:11 amI'm confused, what taxable account counts towards RMD? Or are you globally rebalancing? I'm just not following.grabiner wrote: ↑Thu Jul 02, 2015 7:36 pm If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis.
If you are going to spend the RMD, take it from whichever fund is overweighted in your asset allocation, so that you can rebalance inside the IRA.
If you have an RMD you do need to spend, then you can use the RMD to change your asset allocation as appropriate. If the stock market rose, you can take an RMD from a stock fund, so that you get back down to the appropriate stock allocation.
Re: Which Funds to Take RMD From
Yes, but that isn't quite the argument for holding stocks in a taxable account. You pay taxes on dividends from either bond or stock funds. But bond funds get almost all of their returns from dividends, so you will pay taxes on almost all of your gains. Meanwhile, stock funds get most of their returns from stock price increases, so you avoid paying taxes on most of your gains if you don't sell the stock. If you never sell the stock (leaving it to your heirs or charity), you never pay tax on the capital gain; if you do sell the stock, you pay tax on the capital gain, but many years after it occurs.
Re: Which Funds to Take RMD From
error post
Last edited by CWRadio on Sat Sep 22, 2018 1:05 pm, edited 2 times in total.
Re: Which Funds to Take RMD From
... and stock dividends can be qualified while bond dividends are not. Qualified dividends are taxed at lower rates.grabiner wrote: ↑Sat Sep 22, 2018 12:56 pmYes, but that isn't quite the argument for holding stocks in a taxable account. You pay taxes on dividends from either bond or stock funds. But bond funds get almost all of their returns from dividends, so you will pay taxes on almost all of your gains. Meanwhile, stock funds get most of their returns from stock price increases, so you avoid paying taxes on most of your gains if you don't sell the stock. If you never sell the stock (leaving it to your heirs or charity), you never pay tax on the capital gain; if you do sell the stock, you pay tax on the capital gain, but many years after it occurs.
Re: Which Funds to Take RMD From
Thanks for trying to explain again. I see that if you're not going to spend, you're simply moving the funds from IRA to taxable and keeping them invested in stocks. You're not making any AA changes, just complying with RMD requirement. If your AA was out of whack before, it will still be out of whack after, so you'd have to re-balance either before or after.grabiner wrote: ↑Sat Sep 22, 2018 12:53 pmIf you have an RMD you don't need to spend, you don't need to change your asset allocation. If you sell a stock fund in your IRA to make the RMD, and buy a stock fund in your taxable account, you have just as much in stock as you had before. (And it is better to have stock funds in your taxable account if you are wealthy enough that you aren't spending your RMDs; this is why I suggested using a stock fund.)
If you have an RMD you do need to spend, then you can use the RMD to change your asset allocation as appropriate. If the stock market rose, you can take an RMD from a stock fund, so that you get back down to the appropriate stock allocation.
If spending RMD funds, I got confused by the concurrent withdrawal and rebalance strategy. I would just take out the required RMD and rebalance the remaining as a separate step, or at least it's simpler for me to think of if this way. AFAIK, there isn't any tax consequence to doing so inside the IRA as long as you have enough bonds and stocks to shuffle around. Anyway, it might lead to the the same road to Rome or a slightly different one.
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Re: Which Funds to Take RMD From
As far as having Vanguard withhold taxes on the RMD, I was thinking of NOT doing that, but instead adjust my quarterly estimated taxes to make sure the following April 15th I don't owe a large amount in taxes. The theory being you earn on the funds not withheld -- at least you earn longer with the quarterly estimate payments than if you had the entire estimated withholding done at the time of taking the RMD.
Taking that a little further, it might apply more to my first RMD to be taken Jan-March 2019. Subsequent RMDs may be taken near year's end so having the full withholding taken up front may not make much difference if you're filing your taxes only one or two months later.
Taking that a little further, it might apply more to my first RMD to be taken Jan-March 2019. Subsequent RMDs may be taken near year's end so having the full withholding taken up front may not make much difference if you're filing your taxes only one or two months later.
If I was king: once a stock is purchased, you hold it for 30 days.
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Re: Which Funds to Take RMD From
Owing taxes isn't necessarily a bad thing if you’re willing to pay 1.87% processing fee and use Alliant 3% CB credit card (if you’re in the first year or 2.5% after that).
Re: Which Funds to Take RMD From
This thread is now in the Investing - Help with Personal Investments forum (portfolio help).
FYI - The OP started this thread in 2015. (That's fine, just be aware of the posting date.)
FYI - The OP started this thread in 2015. (That's fine, just be aware of the posting date.)
Re: Which Funds to Take RMD From
I do just the opposite of what you are suggesting. Pay no estimated taxes throughout the year and have my enire tax bill deducted (both fed and state) from my RMD which I take at the end of the year. That way all your money stays invested tax deferred throughout the year and you don't pay any tax till you take that RMD at the end of the year. A lot easier and better than paying estimated taxes throughout the year.Indianrock wrote: ↑Sat Dec 15, 2018 8:49 am As far as having Vanguard withhold taxes on the RMD, I was thinking of NOT doing that, but instead adjust my quarterly estimated taxes to make sure the following April 15th I don't owe a large amount in taxes. The theory being you earn on the funds not withheld -- at least you earn longer with the quarterly estimate payments than if you had the entire estimated withholding done at the time of taking the RMD.
Taking that a little further, it might apply more to my first RMD to be taken Jan-March 2019. Subsequent RMDs may be taken near year's end so having the full withholding taken up front may not make much difference if you're filing your taxes only one or two months later.
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Re: Which Funds to Take RMD From
MPNRET: Yes, some further reading has convinced me your approach is probably what I want to do. And it will include taking a QCD charitable amount out of it along with the withholding. This to be followed by reinvestment in a taxable fund and of course, rebalancing. I may do the QCD portion in November, even though my charity ( church ) is a ten-minute drive from my house.
If I was king: once a stock is purchased, you hold it for 30 days.
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Re: Which Funds to Take RMD From
That's my plan as well, having tax withholding from each withdrawal from tax deferred. But doing the entire withdrawal in one lump in December isn't necessarily optimal. Take this year for example.mpnret wrote: ↑Sun Dec 16, 2018 2:37 pm ...I do just the opposite of what you are suggesting. Pay no estimated taxes throughout the year and have my enire tax bill deducted (both fed and state) from my RMD which I take at the end of the year. That way all your money stays invested tax deferred throughout the year and you don't pay any tax till you take that RMD at the end of the year. A lot easier and better than paying estimated taxes throughout the year.
I've been doing monthly withdrawals since start of retirement at age 63 and will continue to do so when RMDs start for me just over a year from now...
Attempted new signature...
Re: Which Funds to Take RMD From
I can't understand why paying tax earlier than you are required to pay it could possibly be optimal but it's not a big deal. Your RMD is calculated from your previous years balance plus the later you pay your tax the more time you have to determine the exact amount due. Do whatever is convenient.The Wizard wrote: ↑Sun Dec 16, 2018 4:53 pmThat's my plan as well, having tax withholding from each withdrawal from tax deferred. But doing the entire withdrawal in one lump in December isn't necessarily optimal. Take this year for example.mpnret wrote: ↑Sun Dec 16, 2018 2:37 pm ...I do just the opposite of what you are suggesting. Pay no estimated taxes throughout the year and have my enire tax bill deducted (both fed and state) from my RMD which I take at the end of the year. That way all your money stays invested tax deferred throughout the year and you don't pay any tax till you take that RMD at the end of the year. A lot easier and better than paying estimated taxes throughout the year.
I've been doing monthly withdrawals since start of retirement at age 63 and will continue to do so when RMDs start for me just over a year from now...
Re: Which Funds to Take RMD From
My apologies for resurrecting an old thread...
I decided to take my RMD during July. This is perfect for me, as I'm on a 10-month pay schedule. So, it's not a question of timing - I need the RMD to tide me over the summer months.
However, the stock/bond markets have not been too kind. Both are down. Should I withdraw the entire RMD from my bond portion, as it's down the least? Or should I withdraw from the stock portion, as this may help reduce the size of future RMD's?
Thanks.
I decided to take my RMD during July. This is perfect for me, as I'm on a 10-month pay schedule. So, it's not a question of timing - I need the RMD to tide me over the summer months.
However, the stock/bond markets have not been too kind. Both are down. Should I withdraw the entire RMD from my bond portion, as it's down the least? Or should I withdraw from the stock portion, as this may help reduce the size of future RMD's?
Thanks.
Re: Which Funds to Take RMD From
You should take whatever is consistent with your asset allocation. If you are under your target allocation to stock, you should withdraw bonds from your portfolio, and possibly sell bonds to buy more stock.Raraculus wrote: ↑Mon Jun 27, 2022 10:30 pm My apologies for resurrecting an old thread...
I decided to take my RMD during July. This is perfect for me, as I'm on a 10-month pay schedule. So, it's not a question of timing - I need the RMD to tide me over the summer months.
However, the stock/bond markets have not been too kind. Both are down. Should I withdraw the entire RMD from my bond portion, as it's down the least? Or should I withdraw from the stock portion, as this may help reduce the size of future RMD's?
Thanks.
But this may be independent of how you take the RMD, if you have accounts other than the IRA. If you have a Roth IRA or taxable account, you could withdraw stock from the traditional IRA to reduce future RMDs, and move money from bonds to stock in the other account to get the correct stock allocation.
Likewise, if the RMD is more than you need to spend, you can take the excess distribution in stock, and either invest it in your taxable account or use it to pay the tax on converting some of the traditional IRA to a Roth IRA. (The conversion is not a net loss. If you are in a 22% bracket and withdraw $10,000 in stock from the traditional IRA, using $2200 to pay the tax on converting the other $7800 to a Roth IRA, you still have the same after-tax value because the IRS owns 22% of your traditional IRA and none of your Roth.)
Re: Which Funds to Take RMD From
Thank you for your solid advice. It really boils down to asset allocation. I'm overweight stocks, anyway. I decided to take my RMD from my stocks. This will help reduce future RMD's, too! It's just painful. C'est la vie.grabiner wrote: ↑Mon Jun 27, 2022 11:13 pmYou should take whatever is consistent with your asset allocation. If you are under your target allocation to stock, you should withdraw bonds from your portfolio, and possibly sell bonds to buy more stock.
But this may be independent of how you take the RMD, if you have accounts other than the IRA. If you have a Roth IRA or taxable account, you could withdraw stock from the traditional IRA to reduce future RMDs, and move money from bonds to stock in the other account to get the correct stock allocation.