This may very well be stating the obvious....

[progree]

15. One does not have to sell equities in order to make IRA withdrawals (RMD's or otherwise)

Last edited Sun Mar 15, 2020, 12:49 AM - Edit history (1)

one can just transfer the shares from the IRA to a regular taxable account (edited: apparent exception: Fidelity).

For my inherited IRA -- which requires RMDs no matter how young I am (or was) -- I've been selling what I needed to make the RMD (by selling some shares of the one and only holding in this account, which is an equity mutual fund), and then transferring the cash proceeds to the taxable account, and then investing it by buying shares of whatever current equity mutual fund in my taxable account that I want to add shares to.

But I've always could have just transferred the shares instead of doing the sell-transfer-buy routine (edited: oops, apparently not at Fidelity). I've just chosen the sell-transfer-buy routine as I've wanted to redeploy into something different anyway, sort of part of my annual asset reallocation operation. (EDITED LATER: I actually tried doing a direct tranfer of shares from my Fidelity IRA to my Fidelity regular taxable account, but it wouldn't let me -- details in #17 and #18 below. I was so sure that was an option -- maybe it was sometime in the past. Or maybe the Fidelity website is experiencing a glitch)

Either way, the RMD is not forcing me to sell equities at a low point in the stock market or at any other time (oops, exception: Fidelity). By transferring shares, there is no sale of equities.

By doing the sell-transfer-buy routine, yes, I've chosen to sell equity shares (edited: might not be a choice at Fidelity), but as soon as the trade and transfer settles, I buy other equity shares. If that occurs at the bottom of the stock market, well, then, it's sell low and buy low.

I recognize that IRAs were never meant to be eternal tax deferrals, so I don't get upset about RMDs. (Edited: but I'm getting upset at Fidelity). I knew what the deal was when I opened an IRA and contributed to it. I also recognize that I've been fortunate enough to have had significant money to spare all these past years to put into what is ultimately a tax reduction scheme that most people can't take advantage of, or can but only to a much smaller extent than me.

Edited to add: retaining one shred of dignity on my part: the IRS does not require one to cash out their equities or bond / bond funds etc. in order to do an IRA withdrawal -- one can do their IRA withdrawal via a direct transfer of shares. I read that in Bob Carlson's Retirement Watch newsletter.