Chris Farrell
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QI retired a couple of years ago and am approaching 70 1/2, the age for Required Minimum Distribution of my IRA money. It's held mostly in stocks and mutual funds. I'm planning to start taking it monthly to average out the market. The question is, should I take it from the funds that are doing well, from the funds that are doing poorly, or evenly from all the funds?


AI like to take advantage of columns to briefly review the basics. So, very quickly, in the calendar year following the year you turn 70 1/2, you must start withdrawing a minimum sum of money from your tax-sheltered regular IRA. (You don't have to make an age-related mandatory withdrawal with a Roth IRA because it doesn't require minimum distributions.)

The jargon term for the mandatory withdrawal is "RMD" for Required Minimum Distribution. Of course, you can take out more money than the RMD if you want to or need to.

Most major financial institutions that are in the IRA business offer calculators to help you figure out your RMD. In essence, the basic formula comes from two pieces of data. The first is the adjusted market value of your IRA as of Dec. 31 of the prior year divided by your life expectancy taken from the Uniform Lifetime Table published by the IRS. In other words, your RMD changes from year to year.

Now, to get at the specifics of your question I checked in with Bill Wixon, a certified financial planner and head of Wixon Advisors Inc., to get his perspective. We assumed you have spread your savings among a number of the major asset categories, such as stocks and bonds, and that your portfolio has gotten more conservative as you age. Now, let's say your equity portfolios have been doing well.

"Generally speaking, we redeem from equities that are up," says Wixon. "However, if they are considerably up, we just sell them and take the profit and buy bonds or something else that is lower in price and toward the bottom of its cycle [not that we ever really know for sure when that is]."

In short, you would reap gains in your portfolio for your RMD, whether it's a stock or bond or mutual fund. By the way, if you have more than one IRA you have to calculate the RMD for each IRA, but you can withdraw the total amount from one or more of the IRAs.

That said, there's a lot more involved in withdrawing from a portfolio in retirement than RMD. It's part of a much larger financial question. You may have done this already, but I like the idea for someone in your circumstances to consider consulting with a financial planner, preferably a fee-based-only planner.

I know I'm usually wary of putting savers and planners together. But the advice of a professional can be valuable at major transition points, such as the point when you're taking RMD. It's a way to deepen the conversation about finances, as well as your expectations and goals.

Retirees who prefer a do-it-youself approach can profitably check out online financial planning websites like and

Chris Farrell is economics editor for "Marketplace Money." His e-mail is