Updated

Updated · The Motley Fool · Jun 30

Motley Fool Urges Retirees to Spread 2026 RMD Withdrawals as Stocks Risk Full-Blown Correction

Updated

Updated · The Motley Fool · Jun 30

Motley Fool Urges Retirees to Spread 2026 RMD Withdrawals as Stocks Risk Full-Blown Correction

Q: What's the smartest way to take RMDs without locking in losses during a correction?

The smartest way to take an RMD during a correction without locking in losses is usually an in-kind distribution: transfer shares, funds or bonds directly from your IRA to a taxable brokerage account instead of selling them for cash. That satisfies the RMD, keeps you invested for a rebound, and avoids selling depressed assets. You still owe ordinary income tax on the market value on the transfer date, and that value becomes your new cost basis in the taxable account. If you do need cash, avoid taking the full RMD in one shot at a bad moment. Spreading withdrawals across the year lowers the risk of selling everything near a market low. This matters because your RMD is based on the prior Dec. 31 account balance, so a midyear drop does not reduce the dollar amount you must withdraw; waiting until markets are down can force you to sell more shares. For retirees who know they will need cash, the best defense is planning months ahead. Selling gradually when markets are stable or strong gives more flexibility on price and reduces sequence-of-returns risk. If you do not need the money for spending and are charitably inclined, a qualified charitable distribution can also be efficient. It can satisfy some or all of the RMD directly from an IRA to charity and keep that amount out of taxable income. Because missed RMDs can trigger steep penalties, retirees should coordinate timing, taxes and account rules with a financial adviser or tax professional.

3 articles · Updated · The Motley Fool · Jun 30

Retirees taking 2026 required minimum distributions do not have to withdraw the full amount at once and can spread sales across the rest of the calendar year.
That flexibility matters because June's market slide could deepen into a correction, making forced one-shot sales more likely to lock in lower prices.
In-kind transfers from an IRA to a taxable brokerage account can satisfy an RMD without selling stocks, funds or bonds, though retirees may need to withdraw slightly extra because values move during the transfer.
Cash withdrawals still require earlier planning: the report says retirees should line up sales months in advance, while those who do not need money immediately still have the second half of the year to wait for better exit prices.