Some older investors love to hate their RMDs. Why, you may ask?

Well, some may not need the money, while others are not sure what to do with the proceeds of their distribution (e.g., how to reinvest or how to minimize the tax consequences of their distribution).

Enter: rebalancing.

Not necessarily a solution to the above mentioned RMD problems, but possibly a silver lining to the cloud of unwanted distributions. For you see, although rebalancing may be something we all find nerve racking (and counter-intuitive because we are selling our winners to buy more of our losers), it, nevertheless, improves a portfolio’s returns while also reducing a portfolio’s risk. So, the next time you are dreading your RMD, use it as an annual reminder to rebalance your retirement accounts. Something you needed to do anyways!

**Remember, you don’t need to wait for an RMD opportunity to rebalance your portfolio. All investors can rebalance inside of their tax-deferred accounts without incurring tax consequences whenever they want!