Financial advisors are divided over this RMD tax strategy.
Other advisors say that navigating a down market through such strategies simply isn’t necessary if a client is invested properly in their retirement accounts.
“We advise our clients who have reached the magical age of required minimum distributions that there should be a minimum of five years’ worth of distributions invested in liquid high-quality short-term fixed income,” said Michael DeMassa, founder of Forza Wealth in Sarasota, Florida. “In other terms, at least 20% of the IRA should be accessible for required minimum distributions and not subject to stock market volatility. During times of market stress, we can make distributions from the fixed income allocation and not be forced to sell equities at the wrong time.”
