OT Required Minimum Distribution

[wc1934]

I received notice that this year I must take the required minimum distribution from my retirement pension fund.
My money is equally distributed into 3 pots:
High Yield Bond Fund - maybe 8%
Preservation fund (object is to never loose, so gains are 2%)
Fidelity Growth (stocks -most aggressive of the 3 but produced greatest return)

I am looking for suggestions as to which pot I should make the with drawl from, or should I just withdraw equally from the 3.

I am also looking for any re-investment thoughts as well.

Thanks in advance!!

[buddybikes]

>>I am also looking for any re-investment thoughts as well.


This forum of course a new bike

[seanile]

pull from equities right now as the market is still high and could not be pretty quickly. once the market goes down, pull from the safer items that are less impacted, and let the equities recover in the meantime.

[MattTuck]

Originally Posted by seanile

pull from equities right now as the market is still high and could not be pretty quickly. once the market goes down, pull from the safer items that are less impacted, and let the equities recover in the meantime.

I dig it. But if you subscribe to the theory that you cannot time markets, then the question really should be: what is the best allocation for you going forward? Withdraw based on that, and then re-balance to get you the rest of the way toward your desired allocation.

[cderalow]

so my immediate question is:

how old are you that you have to take a distribution and that the gains can't be reinvested?

Never seen that, but I'm also not anywhere near retirement age.

[echappist]

Originally Posted by wc1934

I received notice that this year I must take the required minimum distribution from my retirement pension fund.
My money is equally distributed into 3 pots:
High Yield Bond Fund - maybe 8%
Preservation fund (object is to never loose, so gains are 2%)
Fidelity Growth (stocks -most aggressive of the 3 but produced greatest return)

I am looking for suggestions as to which pot I should make the with drawl from, or should I just withdraw equally from the 3.

I am also looking for any re-investment thoughts as well.

Thanks in advance!!

run, don't walk, to bogleheads; this is the bread and butter of that forum

start a thread under the personal investments , and experienced people will chime in re: best way to take the RMD. You will need to provide relevant info such as tax bracket, SS income, and any pension/annuity.

[Ozz]

Originally Posted by cderalow

so my immediate question is:

how old are you that you have to take a distribution and that the gains can't be reinvested?

Never seen that, but I'm also not anywhere near retirement age.

I think he means invested outside the retirement accounts....

He has to take the RMD, but doesn't need all the cash flow, so what does he do with it?

[Tickdoc]

Cash gifts to your children, grandchildren, or my favorite...fellow paceliners!

[wc1934]

Originally Posted by cderalow

so my immediate question is:

how old are you that you have to take a distribution and that the gains can't be reinvested?

Never seen that, but I'm also not anywhere near retirement age.

I should have been more clear. It is a deferred comp retirement plan. Money went in pre-tax. The distribution will of course be taxed, but theoretically I should be in a lower tax bracket when I receive the distribution.

[wc1934]

Originally Posted by echappist

run, don't walk, to bogleheads; this is the bread and butter of that forum

start a thread under the personal investments , and experienced people will chime in re: best way to take the RMD. You will need to provide relevant info such as tax bracket, SS income, and any pension/annuity.

Thanks Jim. I forgot about that site.

[MikeD]

Originally Posted by wc1934

I received notice that this year I must take the required minimum distribution from my retirement pension fund.

My money is equally distributed into 3 pots:

High Yield Bond Fund - maybe 8%

Preservation fund (object is to never loose, so gains are 2%)

Fidelity Growth (stocks -most aggressive of the 3 but produced greatest return)



I am looking for suggestions as to which pot I should make the with drawl from, or should I just withdraw equally from the 3.



I am also looking for any re-investment thoughts as well.



Thanks in advance!!

What are you going to do with the money? If nothing, put it in a like taxable fund. Unfortunately, RMD's are not eligible for Roth conversions.

I think I'd pull from the preservation fund first, as it will produce less future taxable income.

[pbarry]

I’d go for choice #3. Things are going to slide here pretty quickly.

[the bottle ride]

Do you need the income to live on?
Or do you have to take the distribution -
If you aren’t just taking the minimum amount and the account will
Continues to grow, I would take the distribution from the cash portion.

[veloduffer]

Is this your sole source of retirement funds? How much can you afford to lose?

The Growth fund will be the most volatile - it has the most upside, but it also has the most downside (-40% in 2008/9). It took 8 years for the S&P 500 to recover from its peak in 2000 and 6 years to recover from the highs in 2008. Your timeframe for your money needs is the most important consideration. If you can, keep a few months living expenses in cash so you don't have to draw down your investments in a down market.

Current markets are pointing closer to a recession. Producer indices (PMI) and capital investment are slowing, in large part due to uncertainty from trade tariffs. US GDP is is expected to slow below 2% the next few years. Global markets are slowing - Germany is Europe's dominant economy and it contracted last quarter (while it's German Bunds have a negative yield); China is slowing down from the trade war. It's hard to forecast when the next recession will be, but there will be another recession.

[AngryScientist]

Point A: the recent “which bike hold its value best” strongly pointed to moots. I would probably invest heavily in moots frames; especially if you are somewhere in the normal size range.

Point B: veloduffer is both smarter with regard to finance and more handsome than I am; so his advice MAY be preferable