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The Boeing Company Employees: Should You Delay Your RMD When the S&P 500 Is Down?

The Boeing Company employees should carefully time their Required Minimum Distributions (RMDs) to avoid selling assets at reduced prices during market downturns, as strategic withdrawal planning can help preserve future portfolio growth and minimize unnecessary tax burdens. – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

The Boeing Company employees should consider the impact of market volatility on their RMD strategies, as delaying withdrawals during market downturns can allow for potential recovery, helping to protect long-term retirement assets and minimize tax exposure. – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

Impact of market fluctuations on RMD timing strategies
Differences between RMDs and Roth IRA conversions
Portfolio composition and tax-efficient approaches for The Boeing Company retirees

Navigating RMDs Amid Market Volatility

Market fluctuations can complicate income planning for retirees relying on distributions from retirement accounts. As of 2025, the IRS requires individuals aged 73 and older to take annual RMDs from tax-deferred accounts like 401(k)s and traditional IRAs. The RMD amount is calculated based on the account balance as of December 31 of the previous year, divided by a life expectancy factor provided by the IRS. Younger The Boeing Company retirees, while not subject to RMDs, may still need to make withdrawals to cover living expenses.

Historically, many have delayed their RMDs until year-end to better assess their annual income and potentially minimize tax implications. Others opt for monthly or quarterly distributions. However, with current market volatility affecting major indices like the Dow Jones Industrial Average, Nasdaq, and S&P 500, the timing of these withdrawals has become more consequential.

Challenges of Fixed RMD Calculations During Market Downturns

A key issue is that RMD calculations are based on the account value at the end of the previous year and do not adjust for market declines that may occur afterward. For instance, if a retiree's IRA was valued at $850,000 on December 31, 2024, their 2025 RMD would be approximately $33,000. If the market value drops to $790,000 by April 2025, the retiree is still obligated to withdraw the full $33,000, potentially requiring the sale of more shares at reduced prices.

Pam Krueger, founder of Wealthramp, highlights this predicament: Selling assets at reduced prices to meet a withdrawal requirement based on a higher previous value can be a double-edged sword.

Distinguishing Between RMDs and Roth IRA Conversions

A common misconception is treating RMDs and Roth IRA conversions similarly. While converting funds from a traditional IRA to a Roth IRA during market lows can be advantageous due to tax-free growth potential, RMDs involve mandatory withdrawals that are taxed and, if reinvested, may be subject to capital gains taxes.

George Gagliardi, a certified financial adviser in Massachusetts, advises handling RMDs and Roth conversions as separate strategies. He suggests using more stable assets, like short-term bonds, for RMDs to minimize the impact of market volatility, while reserving assets with higher growth potential for Roth conversions.

Importance of Portfolio Composition

The structure of a retirement portfolio significantly influences RMD strategies. Diversified portfolios typically include a mix of cash, bonds, stocks, and short-term securities. Rob Williams, managing director of financial planning at Schwab, emphasizes viewing the portfolio as a collection of distinct assets rather than a single entity.

Portfolios with low-volatility assets, such as Treasury bonds or short-term CDs, can provide liquidity for RMDs without necessitating the sale of equities during downturns. Implementing bond ladders with staggered maturity dates can help align asset availability with RMD schedules.

Considerations for Inherited IRAs

Inherited IRAs present additional complexities. Non-spouse beneficiaries are required to deplete the account within ten years, with RMDs enforced throughout this period. All distributions are taxed as ordinary income. B Capital

Scott Bishop, a Texas-based money manager, encountered a client contemplating early withdrawals from an inherited IRA due to market declines. He suggests a hybrid approach: withdrawing funds (after taxes) and reinvesting them in a taxable brokerage account. This strategy may result in future gains being taxed at lower capital gains rates, potentially reducing the overall tax burden.

Timing RMDs Strategically

While market volatility adds complexity to RMD timing, thoughtful planning remains essential. Since the RMD amount is fixed based on the previous year's account value, retirees have the opportunity to choose when to take distributions. Delaying withdrawals can allow for potential market recovery and defer associated taxes.

Pam Krueger advises against hastily selling assets during market lows, suggesting that waiting can provide both tax deferral and the chance for account value recovery.

Final Thoughts

In uncertain markets, it's important to resist impulsive decisions. The approach to accessing retirement funds—whether through RMDs, inherited IRA withdrawals, or broader income strategies—should focus on minimizing losses and maintaining portfolio value. For The Boeing Company retirees, this means adopting a methodical approach to withdrawals, utilizing diversified portfolios with components like cash reserves, short-term bonds, and strategically structured ladders to meet distribution needs without compromising future growth.

A Vanguard report from December 2023 indicates that taking RMDs later in the year has historically correlated with higher average portfolio values, as markets often recover from mid-year volatility. In years with presidential elections, the S&P 500 has averaged gains of 7.3% in the second half, suggesting that postponing RMDs may provide more favorable conditions for asset sales.

Analogy

Withdrawing your RMD during a market downturn is akin to selling your home during a housing slump because you must relocate; you may receive less than if you had waited for the market to rebound. By carefully timing withdrawals, retirees can retain more of their investment assets, similar to homeowners waiting for a seller's market. This is especially pertinent when mandatory distributions are based on higher account values from the previous year, regardless of current performance.

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Source:

1. Royal, James. How Required Minimum Distributions Impact Your Traditional IRA Balance. Investopedia , 15 Apr. 2025, www.investopedia.com/required-minimum-distributions-ira-impact-5185475 .

2. Riquier, Andrea. Should I Rush to Take My RMD While the S&P 500 Is Down, or Wait Until the End of the Year Like Normal? MarketWatch , 12 Apr. 2025, www.marketwatch.com/rmd-timing-strategy-s-p-500-2025-5183472 .

3. RMD Strategies to Help Ease Your Tax Burden. Charles Schwab , Jan. 2025, www.schwab.com/rmd-tax-strategy-planning-2025 .

4. Inherited IRAs: What to Know About Taxes, RMDs, and More. Morningstar , Mar. 2025, www.morningstar.com/inherited-iras-rmd-tax-implications-2025 .

5. RMD Strategies for Wealthy Retirees: 2025 Tax Planning Guide. RCS Planning , Mar. 2025, www.rcsplanning.com/rmd-strategies-tax-planning-wealthy-retirees-2025 .

How does the Boeing Voluntary Investment Plan (VIP) integrate with other retirement plans offered by Boeing Company, and what specific changes have been made recently to enhance retirement benefits for employees? Discuss the implications these changes might have on employees planning their retirement.

The Boeing Voluntary Investment Plan (VIP) integrates with other Boeing retirement plans, such as the Boeing Pension Value Plan and other defined benefit plans. Recently, changes like the addition of a Roth contribution option and a shift toward enhanced defined contributions have been made to improve benefits for certain employees, particularly those who previously participated in both defined benefit and defined contribution plans. These changes enhance retirement planning flexibility but may require employees to adjust their strategies depending on their long-term financial goals.

What are the key eligibility requirements for participation in the Boeing Voluntary Investment Plan, and how do these requirements align with industry standards for retirement plans within large corporations? Specifically, address how the eligibility criteria impact various groups of employees within Boeing Company.

Key eligibility requirements for the Boeing VIP include no minimum age or service requirements, though certain groups, such as union employees and non-resident aliens, may be excluded. These criteria align with industry standards, making the plan accessible to a broad range of employees. The inclusivity of eligibility supports employees at various career stages, though exclusions may affect unionized employees or contractors differently from their non-union counterparts(Boeing_Voluntary_Invest…).

In what ways does the Boeing Voluntary Investment Plan support employees who wish to make catch-up contributions, particularly for those nearing retirement age? Examine the financial benefits and potential challenges associated with these contributions for Boeing employees.

Boeing VIP allows catch-up contributions for employees aged 50 and over, aligning with IRS guidelines for retirement savings. This option benefits employees nearing retirement by enabling them to contribute more toward their savings. However, the increased financial burden of larger contributions could pose a challenge for employees with tighter budgets, potentially limiting their ability to maximize catch-up contributions(Boeing_Voluntary_Invest…).

How does the investment allocation strategy within the Boeing Voluntary Investment Plan reflect the principles of risk management and diversification? Evaluate the types of investment options available and their relevance for Boeing employees planning for retirement.

The investment strategy of Boeing VIP emphasizes risk management and diversification, offering a wide range of options, including lifecycle funds, index funds, and company stock. These choices provide flexibility for employees with varying risk tolerances, helping them manage retirement savings effectively. The availability of different fund types ensures that employees can align their investment choices with their retirement timelines and risk preferences(Boeing_Voluntary_Invest…).

What options does the Boeing Voluntary Investment Plan provide for loans and withdrawals, and how do these options affect employeesâ€™ financial planning? Analyze the conditions under which Boeing employees can access their funds and the implications of these conditions on long-term retirement savings.

Boeing VIP offers loans and withdrawal options, including hardship withdrawals and in-service distributions at age 59½. These features provide flexibility in accessing retirement funds but come with conditions that could affect long-term savings. For example, taking a loan or withdrawal may reduce the funds available for retirement and may lead to penalties, making it important for employees to carefully consider the implications before accessing their funds(Boeing_Voluntary_Invest…).

How can Boeing employees effectively utilize the resources available through the Boeing Retirement Service Center to optimize their retirement planning? Discuss the types of support services provided and how they can aid employees in making informed decisions regarding their retirement benefits.

Boeing employees can utilize resources through the Boeing Retirement Service Center, which provides support for retirement planning. The center offers tools, counseling, and online resources to help employees understand their options and optimize their benefits. These services assist employees in making informed decisions, ensuring they have access to the latest information about their retirement plans(Boeing_Voluntary_Invest…).

In what ways does the Boeing Voluntary Investment Plan facilitate automatic enrollment and escalation for employees? Assess the impact of these features on employee participation rates and retirement savings at Boeing Company.

Automatic enrollment and escalation features in the Boeing VIP encourage higher participation rates and increased savings. Employees are automatically enrolled at 4% pre-tax contributions, with an option for annual increases of 1% up to 8%. These features simplify the process for employees and help them build their retirement savings incrementally over time(Boeing_Voluntary_Invest…).

How does Boeing Company ensure that its pension and retirement plans remain compliant with current IRS regulations and requirements? Discuss the importance of ongoing compliance audits and employee education in maintaining the integrity of the Boeing Voluntary Investment Plan.

Boeing ensures compliance with IRS regulations by regularly updating its plans and conducting compliance audits. Maintaining adherence to regulations is essential for protecting the plan's tax-qualified status, and Boeing also focuses on employee education to ensure they understand the requirements and benefits of the plan(Boeing_Voluntary_Invest…).

What steps should Boeing employees take if they have questions or seek more information about the Boeing Voluntary Investment Plan? Outline the available channels for communication and the types of inquiries that can be directed to Boeing's human resources department.

Boeing employees with questions about the VIP can contact the Boeing Retirement Service Center or their human resources department. These channels provide assistance with inquiries related to plan features, contributions, and withdrawals, offering personalized guidance to help employees manage their retirement planning effectively(Boeing_Voluntary_Invest…).

How does the recent shift from traditional defined-benefit pensions to a defined-contribution model, as seen in the Boeing Voluntary Investment Plan, influence the financial security of future retirees from Boeing? Explore the long-term effects this transition may have on employee savings behavior and retirement readiness.

The shift from traditional defined-benefit pensions to a defined-contribution model, like the Boeing VIP, changes the way employees plan for retirement. Employees are now more responsible for managing their own investments and savings, which may lead to varying levels of financial security depending on their decisions. This transition emphasizes the need for employees to be more proactive in their retirement planning to ensure they meet their long-term financial goals(Boeing_Voluntary_Invest…).

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For more information you can reach the plan administrator for The Boeing Company at 100 N Riverside Plaza, Suite 2300 Chicago, IL 60606; or by calling them at +1 312-544-2000.