Stocks Suffer Their Weakest Week Since April, and Buffett’s Rule Offers a Better Way for a 74-Year-Old Facing a $39,216 IRA Withdrawal

Stocks just suffered their weakest week since April 2025, and a 74-year-old with a $1 million IRA still has a $39,216 withdrawal due by Dec. 31. Warren Buffett’s advice is not to dump quality assets just because markets are down. Here is how that can work in practice.

Stocks posted their worst weekly performance since April 2025. An S&P 500 index fund dropped 2.7% from the previous Friday’s close to this week’s close, leaving it 5.6% below its Oct. 6 peak. For most investors, the sensible response in a week like this is simply to stay put.

Some investors, however, do not have that freedom. People age 73 or older with a traditional IRA must take money out by year-end, and that deadline is approaching fast. If the withdrawal is funded by selling stock during a downturn, the sale happens after the price drop.

Buffett’s well-known rule for periods like this is to “be fearful when others are greedy, and be greedy when others are fearful.” He wrote those words in The New York Times during the depths of the 2008 selloff. The point is not to sell strong assets because prices have slipped. A retiree who needs a required distribution can still honor that principle, and the tax code provides a straightforward way to do it.

The retiree and the withdrawal

Consider a 74-year-old who had $1,000,000 in a traditional IRA on Dec. 31, 2025. The portfolio was split 60% in an S&P 500 index fund, or $600,000, and 40% in bonds and cash, or $400,000. The retiree also receives Social Security.

The required minimum distribution for the following year is based on that Dec. 31 balance. At age 74, the IRS life expectancy table uses a divisor of 25.5, which means the withdrawal is:

• Required withdrawal: $1,000,000 divided by 25.5, or $39,216
• Monthly equivalent: about $3,268

Even after the recent selloff, the stock fund is still up 7.8% for the year. The $600,000 position is now worth about $646,959, and the entire IRA is worth about $1,046,959. That does not change the amount that must be taken out. The required distribution remains $39,216.

What it costs to sell now

If the retiree sold index fund shares to generate the $39,216, they would need to sell about 53.3 shares at Friday’s close. At the Oct. 6 high, only about 50.3 shares would have been needed. Selling into the decline means giving up roughly three extra shares, worth about $2,200 today.

That is not a catastrophe in a $1 million account. But it is still unnecessary money left on the table, because the IRS rule never required the retiree to sell stock in the first place.

Option one: use the bond side

The simplest solution is to take the full $39,216 from the $400,000 in bonds and cash. That avoids selling any stock at a depressed price.

• Bonds and cash after the withdrawal: about $360,784
• Stock portion of the IRA afterward: about 64%, up from 60%

The trade-off is a heavier stock allocation. That is acceptable if the retiree planned to rebalance anyway, and it can always be adjusted later when markets are calmer.

Option two: transfer the shares themselves

A less familiar choice is taking the required distribution in kind. Instead of selling shares and withdrawing cash, the retiree can transfer about 53.3 shares, worth $39,216 on the transfer date, from the IRA into a taxable brokerage account.

• The tax treatment is unchanged. The $39,216 is still taxed as ordinary income for the year, just as if cash had been taken.
• The investment stays intact. If the fund rebounds 10%, those shares would be worth about $43,137, preserving a gain of roughly $3,922 that would have been lost in a sale.
• The basis resets. In the taxable account, the shares carry a basis of $39,216, so only gains above that level are taxed later, and potentially at long-term capital gains rates if held for more than a year.

The downside is that the tax bill still must be paid in cash. A retiree who receives the entire distribution in shares would need money from another source to cover the tax bill later, or they would need to withhold cash from elsewhere.

Option three: combine the two

Many retirees may choose a mix of both methods. They can use part of the withdrawal to cover taxes and living expenses, and move the rest in shares. For example, if the retiree spends about $20,000 of the distribution, that amount could come from bonds and cash, while the remaining $19,216 could be transferred as shares and left invested.

What Buffett’s rule does not say

Buffett’s advice is about not fleeing quality assets just because prices have fallen. It does not guarantee that the recent drop was the low point. Stocks could decline further, and a retiree who transfers shares in kind takes that risk in a taxable account rather than inside the IRA.

The rule also does not excuse the deadline. Failing to take the required distribution can trigger a 25% excise tax on the amount not withdrawn, reduced to 10% if corrected within two years. No matter what the market does, the $39,216 must come out of the IRA by year-end.

The takeaway

Stocks just had their worst week since April 2025, and a 74-year-old with a $1 million IRA still must withdraw $39,216 by Dec. 31. Selling stock to meet that obligation would mean selling into weakness. Taking the money from the $400,000 in bonds and cash, or transferring about 53 fund shares out of the IRA in kind, satisfies the IRS without forcing the sale of a quality asset at a lower price, which is exactly the kind of discipline Buffett recommends.