Fixed IRA RMDs Force 73-Year-Olds to Sell Stocks After 20% Drop
Updated
Updated · 24/7 Wall St. · Jun 30
Fixed IRA RMDs Force 73-Year-Olds to Sell Stocks After 20% Drop
3 articles · Updated · 24/7 Wall St. · Jun 30
Summary
A 73-year-old retiree can be forced to withdraw a fixed IRA amount even after a 20% market slide, turning the RMD into a sale of more shares at depressed prices.
RMDs are based on the prior Dec. 31 balance and an IRS life-expectancy divisor, so a $900,000 year-end account does not get a smaller required payout when volatility later pushes the VIX above 30.
That forced withdrawal also counts as ordinary income and can make up to 85% of Social Security benefits taxable, while the 2026 COLA of 2.8% offers little offset.
Possible workarounds include holding one to two years of RMDs in cash or short-term bonds inside the IRA, making in-kind stock transfers, or using qualified charitable distributions to reduce taxable income.
The issue is especially acute for people newly subject to RMDs at 73—those born from 1951 to 1959—because early withdrawal habits can shape portfolio durability for decades.