The RMD conundrum of 2022

[TheWizard]

Not for 2022! I bet all of us wish we took the RMD on 1/3/22.

Why?
I take 1/12 of my RMD each month.
I do invest a lot of my excess retirement income from all sources most months, mostly into stock index funds.

Now it's possible that my RMDs for the next year or two will be less than this year's, allowing me to do a bit larger Roth conversions than I would have otherwise...

 

[yclipse]

Based on what happened in 2020, I have now developed the following recommendation. If you find in early 2023 that you will have to sell some assets in order to make the 2023 RMDs based on the values at end of year 2022, sell the assets early in the year. Don't wait until later in the year. You will be very unhappy if those assets fall in value over the course of the year.

 

[Chuckanut]

Another 10% loss in market value, might just trigger an unplanned Roth conversion before 12/31.

 

[Graybeard]

Why?
I take 1/12 of my RMD each month.
I do invest a lot of my excess retirement income from all sources most months, mostly into stock index funds.

Now it's possible that my RMDs for the next year or two will be less than this year's, allowing me to do a bit larger Roth conversions than I would have otherwise...

Cuz my equity investments were 25 to 30% higher, my net worth was never higher than on 12/31/21. If I could redo this, I'd take my entire RMD on 1/3 as I'd have to sell less shares from equity funds. The way it looks now, I will take the RMD from fixed income. I don't take or need to take distributions for living expenses, so other than the RMD, I have no reason to take any distribution.

 

[Koolau]

One reason I am keeping my Stable Value Fund in my 401K. It will continue to grow so I will never take from it as a loss. I figure, in a situation like this year, I can take my RMD from that fund, and not be forced to take it from one of my stock funds when they are down.

I use this strategy as well. If stocks are depressed, I take from GIF (Stable Value fund/Guaranteed Income fund.)

Also, in years (like 2022) when the markets are up, I take RMDs from "swollen" stocks early in the year in "anticipation" that markets may fall. This year I was right!