Need Postponement of RMD (Required Minimum Distribution) Withdrawal from Retire. Acc.

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  #16  
Old 03-22-2020, 05:54 PM
hollywoodz hollywoodz is offline
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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.
  #17  
Old 03-22-2020, 07:55 PM
biker1 biker1 is offline
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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.

Quote:
Originally Posted by hollywoodz View Post
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.

Last edited by biker1; 03-22-2020 at 08:36 PM.
  #18  
Old 03-22-2020, 08:14 PM
retiredguy123 retiredguy123 is online now
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I would be opposed to postponing the RMD. People should pay their taxes. These taxes were only deferred, not forgiven. So, if you are in your seventies, it is time to pay up.
  #19  
Old 03-23-2020, 06:33 AM
rustyp rustyp is online now
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I am opposed to postponement also. We all had time to rebalance the portfolio to minimize loss. That's the way free markets work. The news from overseas was out there long ago. For every buyer there must be a seller. Giving an investor a bailout will create false sense of security for the future and could result in taking more risks and overbuying - very similar to buying on margin which artificially drives up the market.
  #20  
Old 03-26-2020, 07:25 AM
hollywoodz hollywoodz is offline
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Late last night, the senate passed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act), H.R. 748. It contains a section 2203, at pp. 167-171, titled "Temporary Waiver of Required Minimum Distribution Rules for Certain Retirement Plans and Accounts". The way I read this section, any RMD that was required to be withdrawn in 2020 is waived. But don't rely on my read of this section; ask your accounting professional for expert advice.
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