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Where to Take RMD's From?
Old 04-17-2017, 02:27 PM   #1
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Where to Take RMD's From?

I did a search but didn't see this particular question addressed - for those facing RMD's how do you choose where to draw from? Those funds that are doing the best? Equally from all? Equities before Fixed Income? Do you reinvest or spend the money? I know these are multiple questions, but I don't see a lot of posts on how people do this.? Also in searching, I came across a poster who used to be active here - OBGYN65. Anyone know what became of him? I remember he was very conservative in his investments. He was kind of a contrarian, but I miss his posts.
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Old 04-17-2017, 02:51 PM   #2
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most in this forum use an Asset Allocation strategy meaning if you took from one of your assets...you would need to rebalance by selling the others off and buying a little of what you just took from.

Or, just take an equal % of each equity. So if you have 10 holdings across 401k and IRA, just take equal amount from each.

You might have better investment options or lower fees in one account vs the other so everyone's situation will be different.
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Old 04-17-2017, 05:13 PM   #3
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for those facing RMD's how do you choose where to draw from?
Do you have an IPS or financial plan? If so, follow that or it's time to create your own plan that is specific to your needs and desires.

I can tell you what I have decided to do, but that's a plan that fits my needs and probably would not assist your needs. As Dr. Bernstein once famously wrote ,"dieting and investing are both simple, but neither is easy."

Good luck.
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Old 04-17-2017, 05:54 PM   #4
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I used my RMD's to simplify my accounts. I will not touch the biggest one until last, because it has been the best performing. I used to have 4 IRA accounts, but at year's end I will be down to 2.
I have worked out a gifting program to our sons. I give each one a certain amount on their birthdays. The balance i divide between a donation to a religious organization as a QCD (qualified charitable deduction- no tax liability) and myself.
Our feeling is our sons need the money now, not some time in the future.
YMMV
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Old 04-17-2017, 07:28 PM   #5
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If you rebalance regularly it doesn't matter much what asset classes that you take RMDs from.

I miss Obgyn65 too... he hasn't posted for over 2 years.
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Old 04-17-2017, 08:32 PM   #6
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Obgyn65 is still active on Bogleheads.org March 2017
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Old 04-17-2017, 08:47 PM   #7
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Originally Posted by Idnar7 View Post
Also in searching, I came across a poster who used to be active here - OBGYN65. Anyone know what became of him? I remember he was very conservative in his investments. He was kind of a contrarian, but I miss his posts.
That's a real blast from the past.
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Old 04-18-2017, 05:50 AM   #8
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I used my RMD's to simplify my accounts. I will not touch the biggest one until last, because it has been the best performing. I used to have 4 IRA accounts, but at year's end I will be down to 2.
I have worked out a gifting program to our sons. I give each one a certain amount on their birthdays. The balance i divide between a donation to a religious organization as a QCD (qualified charitable deduction- no tax liability) and myself.
Our feeling is our sons need the money now, not some time in the future.
YMMV


Souschef,

I noticed your AA is 95/0/5 which I assume equates to 95% equities/0% bonds/ 5% cash.

If I may ask....do you have such a high equity position in retirement due to the fact that your monthly expenses are more than covered by 2 pensions and 2 SS payments( with the WR of 2% primarily going to gifting to heirs/charity)? The reason I ask is that my wife and I are in a similar situation where within 3-5 years we will have 2 pensions with SS to follow somewhere between FRA and age 70. This along with RMD's from our Trad. IRA's should more than cover our monthly expenses. So I have been wrestling with the notion to change our AA from 55/45/5 to something like 75/20/5.

Granted, not as aggressive as yours ( if I have interpreted your AA correctly); but still a heavy equity position. But I realize it would be an emotional roller-coaster ride if/when the market tanks.

I assume that perhaps your heavy equity position will benefit heirs/charities down the road as your month to month needs are covered? Just curious on your strategy. Thanks.
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Old 04-18-2017, 07:40 AM   #9
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Our RMDs are largely (but not completely) covered by dividends. We started out the RMD year with a small cash balance and that, together with the dividends, supports the automatic monthly withdrawal and the QCDs.

DW's tIRA should be completely converted to Roth for 2018. I will need to sell something in my tIRA for 2018 to bump up the cash balance but I haven't considered what it might be at this point.
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Old 04-18-2017, 08:07 AM   #10
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Thanks for the replies. I have three buckets - fixed/bonds, balanced, and equities/ETF's. I was thinking of taking most from the one that did best, next from next best, etc. I guess that is basically like rebalancing. I also am considering gifting to children and charity as SousChef is doing.
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Old 04-18-2017, 08:08 AM   #11
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Souschef,

I noticed your AA is 95/0/5 which I assume equates to 95% equities/0% bonds/ 5% cash.

If I may ask....do you have such a high equity position in retirement due to the fact that your monthly expenses are more than covered by 2 pensions and 2 SS payments( with the WR of 2% primarily going to gifting to heirs/charity)? The reason I ask is that my wife and I are in a similar situation where within 3-5 years we will have 2 pensions with SS to follow somewhere between FRA and age 70. This along with RMD's from our Trad. IRA's should more than cover our monthly expenses. So I have been wrestling with the notion to change our AA from 55/45/5 to something like 75/20/5.

Granted, not as aggressive as yours ( if I have interpreted your AA correctly); but still a heavy equity position. But I realize it would be an emotional roller-coaster ride if/when the market tanks.

I assume that perhaps your heavy equity position will benefit heirs/charities down the road as your month to month needs are covered? Just curious on your strategy. Thanks.
You are correct, that our monthly expenses are covered by the 2 SS and 2 pensions. As time has gone on, we have cut back on our traveling, which was a major expense.
If you would consider our income stream came from investments, our AA would be more like 50/45/5.
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Old 04-18-2017, 09:53 AM   #12
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Originally Posted by Idnar7 View Post
Also in searching, I came across a poster who used to be active here - OBGYN65. Anyone know what became of him? I remember he was very conservative in his investments. He was kind of a contrarian, but I miss his posts.
I miss OBGYN65 too. One the few around here that I usually agreed with.
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Old 04-18-2017, 10:52 AM   #13
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I miss OBGYN65 too. One the few around here that I usually agreed with.
Yes, I miss being repeatedly reminded of his selfless humanitarian efforts as a volunteer "clinician" to the poor in Central America. Hey, if you don't let the world know what a wonderful person you are, how will they know?
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Old 04-18-2017, 12:17 PM   #14
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Yes, I miss being repeatedly reminded of his selfless humanitarian efforts as a volunteer "clinician" to the poor in Central America. Hey, if you don't let the world know what a wonderful person you are, how will they know?
Maybe you need to be a little more understanding, remember, you are lucky to live in Texas so you don't need to brag.
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Old 04-19-2017, 11:00 AM   #15
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Maybe you need to be a little more understanding, remember, you are lucky to live in Texas so you don't need to brag.
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Old 04-19-2017, 01:25 PM   #16
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I was thinking of taking most from the one that did best, next from next best, etc.

If that is the extent of your financial planning, go for it.
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Old 04-20-2017, 10:27 PM   #17
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Yes, I miss being repeatedly reminded of his selfless humanitarian efforts as a volunteer "clinician" to the poor in Central America. Hey, if you don't let the world know what a wonderful person you are, how will they know?


(Moved from Texas 20 months ago, but still miss OBGYN.)
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Old 04-22-2017, 03:42 AM   #18
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A few years ago when we were both retired I simplified out IRAs to Wellington (me) and Wellesley (her) and started having dividends from our IRAs placed in MM IRA accounts instead of reinvesting. There was enough invested in our IRAs and after tax money that a cash build up made sense for our purposes. This year my wife has started her RMD and year after next I will start. There is enough money in the MM accounts to take care of RMD for the next 9 years at least. By then we will be in our late 70s and withdrawing from the mutual funds. So I am not concerned since we won't have too many years left anyway unless there are some major breakthrough in medicine. The kids are going to have a nice retirement if they don't get stupid.

Cheers!
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Old 04-22-2017, 06:11 AM   #19
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If you rebalance regularly it doesn't matter much what asset classes that you take RMDs from.

I miss Obgyn65 too... he hasn't posted for over 2 years.
Since we're increasing our equities allocation as we age, we'll take them from bonds.
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Old 04-23-2017, 08:46 PM   #20
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I did a search but didn't see this particular question addressed - for those facing RMD's how do you choose where to draw from? Those funds that are doing the best? Equally from all? Equities before Fixed Income?
It seems to me that these questions are moot if you rebalance regularly.


Quote:
Do you reinvest or spend the money?
Reinvest. My retirement plan did not call for an increase in spending at age 70 1/2.

I think it makes sense to check once a year to see if the original plan needs to be modified. Maybe you haven't been doing that and the RMD will prompt a review.
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