investing

How Investments Are Sold When RMDs Are on Autopilot

The rules vary by company.

I’ve arranged for my IRA administrator to take out RMDs for me automatically, but how does it determine which investments to sell? - G.C., Santa Clara, Calif.

The rules vary by company. At Fidelity, you can have the money withdrawn proportionately from each of your IRA investments (the most common option). Or you can elect a fixed percentage from a few investments or have 100% taken from cash. Vanguard has similar options.Charles Schwab takes automatic RMDs only from cash, and the firm sends an alert two weeks beforehand in case you need to sell shares to raise the money.

Most Popular

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
May 4, 2021
Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?
retirement

Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?

In our experience, many have saved enough money to retire comfortably. Yet too many worry about their money running out and want more. Maybe it’s tim…
May 6, 2021
9 Tax Deadlines for May 17 (It's Not Just the Due Date for Your Tax Return)
tax deadline

9 Tax Deadlines for May 17 (It's Not Just the Due Date for Your Tax Return)

Between due dates for extension requests, IRA or HSA contributions, and other deadlines, there's more to do by May 17 than just filing your federal in…
May 4, 2021

Recommended

10 Questions Retirees Often Get Wrong About Taxes in Retirement
retirement

10 Questions Retirees Often Get Wrong About Taxes in Retirement

You worked hard to build your retirement nest egg. But do you know how to minimize taxes on your savings?
April 7, 2021
The Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs
Financial Planning

The Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs

Retirement savers who are 72 must start withdrawing funds from tax-advantaged retirement accounts. Here’s what you need to know about required minimum…
March 4, 2021
Tax Tip: Reporting a 2020 RMD From an IRA That You Later Returned
Coronavirus and Your Money

Tax Tip: Reporting a 2020 RMD From an IRA That You Later Returned

If you paid back a "required minimum distribution" from an IRA last year, you still have to report the payout on your 2020 tax return.
February 23, 2021
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

There were a lot of tax changes for the 2020 tax year. Get familiar with them now – before you file your 2020 tax return.
February 8, 2021