Listener question: How can a retiree who is forced to take RMDs by law deal with the current bear market?

Everyday Wealth

Jean Chatzky

Investing, Business, Education

2 • 935 Ratings

🗓️ 6 September 2022

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

Soledad, Jean, and Edelman Financial Engines wealth planner Isabel Barrow answer a listener’s questions about required minimum distributions (RMDs) and discuss strategies that a planner can help you put into action during a bear market

Investing strategies, such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. Funds and ETFs are subject to risk, including loss of principal. All investments have inherent risks. There can be no assurance that the investment strategy proposed will obtain its goal. Past performance does not guarantee future results.

Dollar Cost Averaging does not assure a profit or protect against a loss in a declining market. For the strategy to be effective, you must continue to purchase shares in both up and down markets. As such, an investor needs to consider his/her financial ability to continuously invest through periods of low-price levels.

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Transcript

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0:00.0	This is Edelman Financial Engines Everyday Wealth,
0:06.8	This is Edelman Financial Engines Everyday Wealth
0:10.4	with award-winning journalist Soledad O'Brien,
0:13.0	personal finance expert Jean Chatsky,
0:15.0	and Edelman Financial Engine's wealth planner Isabel Vero.
0:19.0	So Isabel, we got a question from a listener
0:22.0	who would like to remain anonymous, and he asked,
0:26.1	how can a retiree who is forced to take RMD's by law deal with the bear market like the one that we're in right now and let me just
0:37.4	ask you to start by explaining our MDs. Right this is a really common question.
0:43.0	RMDs are required minimum distributions and they are related to retirement accounts, so maybe it's a 401k,
0:50.0	403b IRA, but for those people who are turning 72 within that calendar year, so it's not
0:57.0	on your birthday, it's in the year that you turn 72, you have before the end of that calendar year or if it's your first one up until April 1st of the following year to begin with drawing and then once you start you have to keep doing it every single year and the number gets recalculated based on
1:14.5	your balance. So for those who are at home trying to do it themselves to find out
1:20.4	how much you need to withdraw you have to figure out the account value on
1:24.6	December 31st the previous year. You have to go to the IRS and get their calculations
1:29.8	worksheet that are updated every year for life expectancy and then also know that there are
1:37.2	maybe different situations that weren't different tables.
1:40.4	So there's not just one table. There's multiple tables.
1:42.5	This sounds so easy.
1:43.5	Right, it's super simple.
1:44.5	Just go out and do it on your own.
1:46.0	It'll be no problem.
	...

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