Your RMDs Don’t Wait for the Market. Is Your Retirement Ready?

Once you reach your 70s, the IRS requires you to start withdrawing money from your traditional IRA and 401(k) every year.

These are called required minimum distributions, or RMDs.

And they come due whether the market is up, down, or in free fall.

At the same time, inflation keeps chipping away at what each withdrawal can buy.

According to SS&C ALPS Advisors, inflation has averaged about 3.4% a year over the past decade.

At that pace, a dollar loses nearly 30% of its buying power in just ten years.

But here’s the problem: Many retirees don’t think about their RMDs until the withdrawal is already due.

Why retirees should pay attention

If your RMD comes due right after a market drop, you may have to sell investments at a loss just to meet the requirement.

That can lock in losses you might otherwise have waited out.

Some retirees plan ahead by setting aside money that’s scheduled to become available in the years they expect to need it.

That way, a mandatory withdrawal doesn’t turn into a forced sale.

Inflation is the other challenge.

Official inflation numbers don’t always reflect what retirees actually spend money on.

Healthcare costs, in particular, can rise faster than the overall index.

And because your RMD is based on your account balance, the amount you have to withdraw can change from year to year.

The lesson: plan your withdrawals before they’re required

Before your next RMD, ask yourself:

Do I know where this year’s withdrawal will come from?

And:

Is my retirement positioned to keep up with my real cost of living, not just the official inflation rate?

For some retirees, holding physical gold and silver, assets that have historically been viewed as a hedge against inflation, may be worth considering as part of a broader diversification strategy.

RMDs aren’t a reason to panic. But after decades of saving, you deserve a plan for taking money out that’s as thoughtful as the one you used to put it in.

Is your retirement too concentrated in one asset?

Talk through your options in a free, no-obligation strategy call with a Precious Metals Specialist.