75 and Stocks Are Down? Your RMD Doesn’t Have to Come From the Bottom

You’re 75, most of your IRA is in stocks, and the market has fallen. Your required minimum distribution still has to come out before year-end, and the easy way to get that cash is to sell shares at a low price. Three funds give you something else to sell: the State Street SPDR Bloomberg 1-3 Month T-Bill ETF (NYSEARCA:BIL), the Schwab Short-Term U.S. Treasury ETF (NYSEARCA:SCHO), and the PIMCO Enhanced Short Maturity Active ETF (NYSEARCA:MINT). All three hold near-term debt that has stayed far steadier than stocks.

What Selling Stocks in a Down Year Really Costs You

Selling below your purchase price inside an IRA generates no deductible capital loss. If you withdraw the proceeds, that money is no longer invested and cannot participate in a subsequent market recovery.

A down year also makes the distribution feel bigger. According to IRS Publication 590-B, the required amount is figured from the IRA’s value at the close of business on December 31 of the year immediately prior. A drop during the current year doesn’t lower this year’s requirement, so you take out the same dollars from a smaller account (one of nine IRS rules that quietly drain retirement accounts, all charted in our free tax trap map).

Why Your Cash Reserve Sits Inside the IRA

The solution is to hold a stable, cash-like reserve inside the IRA, so the distribution comes out of that reserve and your stocks stay put. Timing matters. These funds only help if they’re already in the IRA before the distribution is due. Money kept outside a retirement account can’t meet an IRA’s requirement.

Own more than one IRA? Publication 590-B says you must figure the required distribution separately for each IRA, but you can withdraw the total from one IRA or from more than one IRA. You can take the whole amount from the account holding the stable funds and leave the stock-heavy accounts alone.

Some custodians also let you take a distribution in shares instead of cash. Check with your custodian and a tax professional on how that works and how it gets reported.

BIL Gives You the Steadiest Footing

BIL holds U.S. Treasury bills that mature in one to three months, plus a cash position in a government money market fund. It’s the largest of the three, with about $47.1 billion in net assets as of June 30, 2026. BIL moved 0.32% over the past month and returned 3.67% over the past year on an adjusted basis. It pays out monthly, and the October distribution was $0.263176 per share. For comparison, 13-week T-bills recently yielded 4.14%.

SCHO Keeps Costs Minimal in Exchange for More Price Movement

SCHO tracks the Bloomberg US Treasury 1-3 Year Index, so it holds Treasury bonds that mature in one to three years. Its 0.03% expense ratio costs you about $3 a year for every $10,000 invested. Net assets came to roughly $13 billion as of June 30.

Bonds with longer maturities react more to interest rates. SCHO moved 0.75% over the past month, compared with BIL’s 0.32%. Over the past year, it returned 1.78% on an adjusted basis, and its five-year return of 10.52% trails BIL’s 20.03%. In other words, that extra maturity has cost SCHO holders over the past five years.

MINT Pays More but Takes On Credit Risk

MINT launched in November 2009 and aims for “maximum current income, consistent with preservation of capital and daily liquidity.” PIMCO’s managers choose which short-maturity bonds to hold, and a large share of the portfolio is in corporate bonds. Corporate debt comes with credit risk that Treasuries don’t have, since a company can be downgraded or miss a payment.

That extra risk has paid off lately. MINT returned 4.19% over the past year, the best of the three, and paid out $4.112 per share over the trailing 12 months. Active management costs more, though. The 0.36% expense ratio comes to about $36 a year per $10,000.

Trade-Offs to Weigh Before the Deadline

Each fund holds bonds that mature, but the fund itself keeps buying new ones as the old ones pay off. So there’s never a date when you’re guaranteed your original share price back. Even funds holding near-term debt can slip in price, whether from SCHO’s sensitivity to interest rates or MINT’s exposure to corporate credit.

Payouts change, too. BIL’s October distribution of $0.263176 is below its monthly payments in 2024, which ran from $0.334568 to $0.406361 per share. MINT’s payments have also come down from their 2024 levels. If short-term rates fall further, all three will likely pay less.

Why These Funds Fit a Retiree Facing This Year’s RMD

At 75, with stocks down and the distribution due anyway, what you need is something other than stocks to sell. BIL is the steadiest. SCHO is the cheapest way to hold slightly longer Treasuries. MINT pays more if you can live with some credit risk. Held inside the IRA ahead of time, any of the three lets you meet the requirement while your stocks stay invested for the recovery.

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