Reducing the Pain From Required Retirement Withdrawals This Year

Millions of retirees will get friendly reminders from their banks and brokerages in coming weeks to take required withdrawals from their 401(k)s or other retirement accounts by the end of the year.

The annual ritual might feel particularly painful this time, with the S&P 500 down nearly 25% for the year through September. Many retirees will have to withdraw and pay taxes on a bigger percentage of their nest eggs than they might prefer, because the formula for calculating the required minimum distribution, or RMD, is based on the account’s balance at the end of last December—before the markets sagged.