RMD Timing

Submitted by Anthony Romano on Sat, 2020-04-04 13:02

The main questions I have are: I have to begin taking RMD’s in 3 years. What ETF will be most likely to rebound in 3 years? Should I allocate my investments according to my RMD timetable?

This is what I am invested in now and my immediate planning. Any advice would be appreciated.

I will be 69 in November I have a 401K and IRA. I also started a Roth this year with $5000 from my 401K. In my 401K I have 3 Funds. I can not tell the symbol because I am told they are institutional funds. However, on the plan website it describes them as Blackrock Large Cap, Blackrock Small-Medium Cap and I have a company stock fund. In my IRA I am totally invested in VTI. I started the Roth invested in VIGAX. I just rolled over my company stock to the IRA as cash and will be selling to convert into the Roth VIGAX. I will do this for tax reasons because the stock is down now and to diversify. I am thinking about rolling over my two remaining 401K funds to the IRA for a couple of reasons. It is easier to communicate with the folks at my IRA and there are more investment options there. It seems like the Blackrock Large Cap didn’t decline as much as the small-medium cap so I don’t know if I should leave that Blackrock Institutional fund in the 401k.

I am totally invested in stocks and don’t understand the value of bonds.

Any advice would be greatly appreciated



Submitted by Alan - IRA critic on Sat, 2020-04-04 18:26

  • Many of your questions are investment related, and this is not an investment forum. That said, no one predicting which investments will do better in a nasty recession or coming out of the recession has much credibility. I will say the small and mid caps always underperform in a bear market, but could do better coming out of a bear market since they have been oversold. VIGAX is a growth fund, but in a recession and bear market (we are in both right now) value usually outperforms growth (loses less).
  • Do not allocate investments  according to RMDs. Your first RMDs will only be based on about 4% of your prior year end account balance. No financial planner would recommend much more than 50% in stocks by the time RMDs begin, and 50% would itself be considered extremely aggressive.  As such you would not have to take any RMDs from stocks, and if you did you can transfer the shares to a taxable brokerage account since the RMD does not have to be taken in cash. 
  • In the interest of diversification, probably good to reduce your company stock holding to no more than 10% at the most. 

Add new comment

Log in or register to post comments