RMDs + Sequence Risk = Retirement Destruction?
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend Reading
You may have heard about how required minimum distributions (RMDs) can throw a wrench into even the best-laid retirement plans. It’s not just about taking money out of your IRA. It’s about being forced to do so—sometimes at the worst possible moment.
READ THE ARTICLEWhat You Should Know: This article walks through the potential pitfalls of RMDs colliding with sequence of returns risk (AKA, what happens when you experience poor market returns early in retirement). The result? You could draw down savings faster than planned, leaving less behind to recover when the market rebounds. But take a breath—there are ways to plan ahead:
📌 Don’t Wait to React: Spreading RMD withdrawals across the year can help you avoid selling at the worst possible time
📌 Consider Roth Conversions: Moving money to a Roth IRA before RMD age can help reduce taxable income and future withdrawals
📌 Stay Invested: You can take your RMD and reinvest what you don’t need to spend, keeping your money working for you
Key Takeaway: RMDs can add a layer of complexity to your retirement strategy, but they don’t have to be destructive. With a thoughtful plan in place, you can navigate these waters confidently.