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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (22003)	2/28/2015 3:51:56 PM
From: JimisJim	Read Replies (1) \| Respond to of 34328

Yes, I think my father got hammered in 2008's RMD... <If you take it out early and stash it in a taxable account, then what?> MLPs and/or other tax advantaged holdings? <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 was not the case in his 70s, but he does now depend on his (and my mother's) IRAs for rapidly increasing fees at their retirement "village" where they paid a substantial amount (equivalent to the price of a house) up front for a townhome/duplex in which their equity disappeared (part of the entry fee deal) after 10 years and which also charges a hefty monthly fee that has been increasing 10%-15% a year since they moved in 15 years ago... the upside to the retirement village is that they agree to take care of my parents for the rest of their lives, providing assisted living and/or nursing care in their large main complex when/if needed and that agreement is binding even if my parents run out of money... the risk is if the corporation that owns the retirement village goes bankrupt, well... it would be big problem, but fortunately it does not appear likely that they will go under -- ditto for my parents barring any major health expense not covered by my father's very generous pension plan (which could be at risk as the company can cancel it anytime they choose and the company is one of the few still paying my father's generation a traditional pension PLUS health benefits in retirement to cover whatever Medicare won't). The bright spot was that he'd converted about 1/3 of their investible assets to Roth IRAs early in his retirement at age 63-69 (spreading out conversion costs over time in his name and also in my mother's name), so his RMD starting point was significantly reduced to start with... still... he had a bad time when the crisis hit his portfolios and he still had to sell. I'm still crunching the numbers under a variety of scenarios to figure out if, in fact, I'll be able to satisfy RMDs via divvy/distribution income alone, AND various tax implications... I like EKS's idea of taking RMDs in the form of Roth conversions, but need to research to see if that is kosher or not with the IRS. I see your point about late year "rebalancing" to satisfy the RMD, however, the risk there is that your IRA value is determined on Dec. 31st for the following year's RMD calculation and if the general market goes plunging the entire ensuing year, you end up having to take a high RMD and raise the cash selling into a general market correction/selloff -- this is sort of what happened to my father, though the IRA value was already declining, the value was significantly higher on 12/31 than at any point the following year when he actually had to sell stock to meet the RMD, and the value of his IRA kept plunging all year, meaning that by waiting until late in that year his IRA was down 40% from 12/31 the previous year and he ended up having to sell at 60 cents on the dollar and a lot more stock, too, as a result... it was painful to watch. Thx for your input... there's still a lot of mystery to me about the exact best way to manage retirement income, but I learn a lot more about it all of the time thanks to everyone here sharing their experiences and thoughts.