Rmd timing

[ripper1]

I have a mid five figure Inherited Ira that I have to take a RMD from before the end of the year. I have taken this rmd in the past monthly or at the beginning of the year. I am thinking now might be a good time to take it with the market at an all time high. Any thoughts folks?

 

[braumeister]

Only you can answer, since it depends on both the holdings in the IRA and your personal tax situation. Not enough info in the question to respond.

 

[samclem]

The "all time high" has nothing to do with what will happen next, of course. Every time in the past that the market hit new highs it went on to have even higher-highs later (maybe the very next day, maybe in a year plus).

- If you want to bet that the market is going to fall or you want to be covered if it does, you could take the RMD and put the money into an after-tax account, invested in equities. If the market drops you can sell the shares later and harvest the losses to reduce your income (and taxes). Obviouslyu, you can't do that if it stays in the IRA. OTOH, if the market goes up the gains would be taxed at the favorable cap gains rates (0% if you are in the 15% bracket), not the higher rate they would be subject to when withdrawn from the IRA. So, I don't see any down side to taking the money now.

 

[REWahoo]

I am thinking now might be a good time to take it with the market at an all time high. Any thoughts folks?

It could go higher: Why we’ll see Dow 18,000 before this bull run ends

...or not: New Critical Warning as 2013 shocker looms

 

[GrayHare]

If you are convinced the IRA investment is peaking, now is reasonable time to withdraw... but no one can time the peak that well.

If it's a tIRA then I agree with samclem. If it's a Roth IRA, if you wait until the end of the year and the Roth's investments increase in value even further, you'll pay no tax on that gain.

 

[MichaelB]

You don't need to take the distribution now, it's a tax deferred account. If you think you can time, then sell what is at a peak and invest it in an interest bearing asset until year end. No sense in giving up the tax deferral until you need the money or cannot delay.

 

[gerrym51]

It could go higher: Why we’ll see Dow 18,000 before this bull run ends

...or not: New Critical Warning as 2013 shocker looms

don't forget this book from dec 1999


Dow 40, 000: Strategies for Profiting from the Greatest Bull Market in History: David Elias: 9780071351287: Amazon.com: Books

 

[walkinwood]

You don't need to take the distribution now, it's a tax deferred account. If you think you can time, then sell what is at a peak and invest it in an interest bearing asset until year end. No sense in giving up the tax deferral until you need the money or cannot delay.

+1.
What you sell or buy in the IRA is not connected to when you need to withdraw. In fact, if you have the choice, and are planning on investing the withdrawn amount, it is better to withdraw when the market is low - you pay less taxes.

Why not treat RMDs from an IRA just like withdrawals from a retirement portfolio. Keep the next 2-3 years of RMDs in a safe investment so that you're never forced to sell something in a slump just to meet RMDs.