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Strategies & Market Trends : Dividend investing for retirement

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To: JimisJim who wrote (22000)	2/28/2015 3:14:31 PM
From: upanddown	Read Replies (1) of 34328

My father got crushed by RMD and his refusal to accumulate the coming year's RMD cash during the previous year and was thus forced to sell a significant amount of stock at rock bottom prices. Jim, I'm curious as to what year you are referring to with your father. I'm guessing 2008? Not many Decembers since then with rock-bottom prices. FWIW, this is my experience with RMDs. I turned 75 late last year and I've been dealing with rather large RMDs for the last five years. With my wife turning 70 1/2 this year (she denies it but the IRS doesn't agree<G>), it's up to about 130K. I normally take the RMD distribution between Christmas and New Years. I don't worry about cash availability. There is always something that has gotten overweight or some dogs that you have wanted to dump for a long time anyway. It is just another way to do some clean-up and rebalancing at year end. The odds are pretty good that you are better off selling in December rather than earlier in the year since Dec is one of the best historical months and in the last 70 years, the S&P 500 is up 55 years and down just 15. If you leave sufficient cash in the IRA for the RMD at year end, it is then just dead money. If you take it out early and stash it in a taxable account, then what? If you invest that, you could generate what you don't want, which is more taxable income. All this is moot for anyone who takes their RMD in stages during the year for immediate living expenses but that doesn't sound like the case with your father. I may reserve more cash during the year if I ever approach your father's age where the RMD % is much higher but right now, the late year RMD serves as our primary income for living expenses for the following year. John

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