A:

If you move you funds from stocks and bonds to cash, the movement will not be taxable. The money is taxable only if you take (distribute/withdraw) it from your IRA, and the amount is not rolled over back into another retirement account.

You should check with your advisor about any advisor fees for such a transaction, as these may apply and are likely to differ from one advisor to another.You may want also want to talk to your advisor about rebalancing your account in general; he or she can help you do this in a way that will minimize losses.

Consider too, that if you are taking substantially equal periodic payments (SEPP) under the amortization or annuitization method, you could switch to the required minimum distribution (RMD) method to withdraw a smaller amount each year. Of course, this would work only if you can get by on the smaller amount.

For related reading, see Bear-Proof Your Retirement Portfolio.

This question was answered by Denise Appleby.

RELATED FAQS
  1. What are the "certain requirements" that must be met for substantially equal periodic ...

    For substantially equal periodic payments (SEPPs), the distributions would occur from your IRA after you rollover the assets. ... Read Answer >>
Related Articles
  1. Investing

    6 Key Questions to Ask Your Financial Advisor in 2016

    While hiring a financial advisor is a good idea for your investments, it can be hard to know who to trust. These 6 questions will help you choose.
  2. Financial Advisor

    How to Interview Your Financial Advisor

    When it comes to choosing a financial advisor, investors have to do homework. That means interviewing multiple advisors and asking the tough questions.
  3. Financial Advisor

    4 Signs It's Time to Fire Your Financial Advisor

    Financial advisors provide valuable advice, but if your advisor communicates poorly, then it may be time to fire them.
  4. Retirement

    5 Things to Think About When It's Time to Retire

    Planning for retirement can be overwhelming, but considering these five questions is a great way to get started.
  5. Financial Advisor

    4 Reasons Your Financial Advisor Could Dump You

    Sometimes, you are not the one who calls things off with your advisor – and these reasons could explain why.
  6. Retirement

    Options for Your 401(k) at Retirement

    What to do with your 401(k) could be your most critical financial decision for retirement. Look at your entire financial portfolio to decide what’s best.
  7. Financial Advisor

    7 Financial Advisor Red Flags

    Not all financial advisors are equally competent. When in doubt, watch out for these warning signs.
  8. Retirement

    Tapping Retirement Funds Early – Without A Penalty

    The IRS offers several ways to skirt the 10% penalty on early retirement distributions.
  9. Financial Advisor

    Why a Financial Advisor Is Crucial in Retirement

    If you’ve been planning your retirement strategy on your own, bringing a financial advisor on board to help can be a wise move as you get older.
  10. Investing

    Will Technology Displace Human Financial Management?

    Technology is creating more tools that help individuals avoid the common financial management and money management firms.
RELATED TERMS
  1. Fee-Based Investment

    An investment account in which the advisor's compensation is ...
  2. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  3. Required Minimum Distribution - RMD

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  4. Fixed Amortization Method

    One of three methods by which early retirees of any age can access ...
  5. Substantially Equal Periodic Payment - SEPP

    A plan that allows individuals who have invested in an IRA or ...
  6. Fixed Annuitization Method

    One of three methods by which early retirees of any age can access ...
Hot Definitions
  1. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  2. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  3. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
  4. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. ...
  5. Dark Pool

    A dark pool is a private financial forum or exchange for trading securities.
  6. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
Trading Center