OK, I will explain it to you. You were complaining that you had to take RMDs from a retirement account that had dropped in value. Well, only the equity portion of your retirement account has dropped in value. Don't take RMDs from the equity portion of your account (that is down in value but will recover with time). Redeem from bonds and cash - the non-equity portion of your account. They haven't dropped in value. If you are at an age where you need to take RMDs then you should have a significant portion in non-equities. Yes, your total account is down in value but the equity portion will recover - let it ride. Also, the amount you need to redeem is a percentage of the account value. Since the total account value is down you won't have to redeem as much. It is not up to the Government to fix poor money management on your part.
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Originally Posted by hollywoodz
This is a reply to "biker1", who says he/she does not see a problem with making an RMD withdrawal this year. The problem is clear as day: the present IRS law says YOU have to make a withdrawal from your retirement account this year. It does not matter whether you have bonds, stocks, cash, etc. in that retirement account. So whatever total value you have, it will be reduced by the amount you have to withdraw. Just how many retirees have all cash in a retirement account so as not to be affected by the plummeting stock market (and it will continue), which would be earning less than .50% or so and on which any retirees live on and pay daily expenses. More often than not, every such retirement account has been grievously affected by the downturn in the present market, so if you say there is no problem in reducing such an account by the amount of an RMD this year, you probably would be a person I would not want to come any where near my account. Let's hope the Treasury Secretary or Members of Congress think differently; they sure did when the 2009 financial crisis hit, when the RMD withdrawal was postponed for a year.
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