Retirement - when/how to withdraw funds

[ps56k]

I keep reading articles about retirement and funding, etc - and then the 4% withdraw phase.
But I haven't really seen anything regarding which funds and when to withdraw.

My wife is a teacher - and going to retire in a couple of years - if Illinois still allows them their pensions -
That's another story, as 90% of the money in her pension was earned and deposited by HER, not the state.

SO - cash flow is not really an issue... but just wondering later down the road.
At some point we will have - both retired in late 50's :

teacher pension - when does that payout ? can you delay ? can you take smaller monthly amounts vs fixed ?
SS - put that off till distant 70 - to hard to think about now - can you take smaller monthly vs fixed ?
IRA - both have normal IRA - no Roth
Vanguard mutual funds - variety long term stock/bond index portfolio
Schwab stocks - variety long term stock portfolio
Chase checking acct - cash
some CD ladders

SO.... when the direct income flow is turned off, then what ?
what do you tap....

[livesoft]

Well, the "ZERO taxes in retirement" thread was 3 pages of comments on when/how to withdraw funds: viewtopic.php?t=87471

Basically, the solution is to use a calculator like www.i-orp.com backed up by TurboTax and your tax knowledge gleaned from many years of doing your own tax returns in order to decide how to sequence withdrawals from multiple places at the same time.

[Minot]

Previous threads on this topic:

http://www.bogleheads.org/forum/viewtopic.php?t=48658
http://www.bogleheads.org/forum/viewtopic.php?t=4604
http://www.bogleheads.org/forum/viewtopic.php?t=85311&mrr=1320480657
http://www.bogleheads.org/forum/viewtopic.php?t=79751
http://www.bogleheads.org/forum/viewtopic.php?t=67366

Regarding your teacher pensions questions, I think you'll have to ask your HR department.

Social Security, you can only take the full monthly amount. How much that is depends on whether you take it early or late.

Minot

[Peter Foley]

The general rule is to withdraw from taxable first, then tax deferred, then Roth. This allows your tax deferred and Roth to continue to compound. The Roth is last because it is not subject to required minimum distributions. However, this is not the best approach for everyone. One has to consider their tax rate prior to receiving SS, after taking SS, and when taking RMD’s.
If you were to provide some idea as to your projected tax bracket in these stages of retirement, an appropriate answer could be provided.
Having a few low tax years prior to taking SS gives one a lot of options with respect to withdrawals.

[BHCadet]

The general rule is to withdraw from taxable first, then tax deferred, then Roth. This allows your tax deferred and Roth to continue to compound. The Roth is last because it is not subject to required minimum distributions. However, this is not the best approach for everyone. One has to consider their tax rate prior to receiving SS, after taking SS, and when taking RMD’s.
If you were to provide some idea as to your projected tax bracket in these stages of retirement, an appropriate answer could be provided.
Having a few low tax years prior to taking SS gives one a lot of options with respect to withdrawals.

If you're 70 1/2 or older, take RMD first.
Then taxable, then tax deferred, then ROTH.

[trasmuss]

The current tax laws make taxable equity investments very attractive if you are in the 15% bracket. Dividends are tax free. Inheritance is also tax free (stepped up basis) to your heirs.

It may make sense (depending upon your circumstances) to withdraw from tax deferred up to the 15% bracket and then perhaps look at taxable.

Everyone will have to decide for themselves depending upon their circumstances. I just don't feel that the old saying "take from taxable first" is always relevant.

Tom

[caroljm36]

If you're 70 1/2 or older, take RMD first.
Then taxable, then tax deferred, then ROTH.

I thought RMD was what one set up for tax deferred. What else would it before if not that?

Taxable and Roth don't have to be distributed any particular way do they?

[Peter Foley]

What I understood BHCadet to mean is that if you are 70 1/2 or older you must make sure you take your RMD, then taxabler, then tax deferred, then Roth.
You are correct that taxable and Roth can be taken any time.

The OP and his wife are both planning to retire in their late 50's so taking their RMD is not the issue at hand. The tax rate they will pay when they start taking RMDs may be a factor they can control with a tax savvy withdrawal sequence in their 50's and 60's.