How do you prepare for and start withdrawal stage....

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ndnboy
Posts: 83
Joined: Tue Apr 17, 2018 5:16 am

How do you prepare for and start withdrawal stage....

Post by ndnboy » Tue Oct 23, 2018 5:47 am

We are currently 50 and about 5-7 yrs out from retiring. At 55 I will have my pension (which i currently draw) and our taxable acts to draw from, covering us to the 59 1/2, to then draw on our TSP/401K acts. Per my calculation my pension should fund a good 50% of our retirement income. Current AA has about 60% in TSP/401K and 35% in taxable acts, with an overall 75/20/5 split. We continue to work and max our TSP/401K annual contributions.

Would like info on how to approach withdrawals, from what acts, at what time to bridge and moving forward etc....

At age 55:
Pension
Taxable 4%

- This will cover our living expenses but not wanted travel / flexibility.
- Do I consider increasing the 4% to reach the desired annual income or do I try and adjust for travel as needed?
- How to withdraw from taxable, Divs 1st then sell stocks/ETFs? (I stopped our reinvesting of Divs and let it build in our sweep act till needed)


At age 59 1/2:
Pension
Tax/TSP/401K = 3%

- This will meet ideal income.
- What % of what act do I draw from for the annual 3% withdrawal?
- Do I continue to draw from taxable or completely from TSP/401K?


At age 62:
Pension
SSN = ???
Tax/TSP/401K = ???

- Do I just lower the Tax/TSP/401K 3% per what SSN covers?


At age 70:
Pension
SSN = ???
RMD from TSP/401K = ???
Taxable = $0

- If RMD covers full 3%, do I leave remainder of taxable for legacy / setup options?

Thanks.
Last edited by ndnboy on Tue Oct 23, 2018 7:31 am, edited 1 time in total.

annielouise
Posts: 345
Joined: Wed May 14, 2008 4:11 pm

Re: How do you prepare for and start withdrawal stage....

Post by annielouise » Tue Oct 23, 2018 7:23 am

How good are your Excel skills?

You can set up a spreadsheet that allows you to play with these numbers and determine the best strategy. Mine has one worksheet just for calculating RMDs and a second that calculates income needs and where it draws from (and how long money will last). Of course much is guesswork, so I try to leave a good error margin.

B. Wellington
Posts: 136
Joined: Fri Mar 30, 2012 10:10 am

Re: How do you prepare for and start withdrawal stage....

Post by B. Wellington » Tue Oct 23, 2018 7:26 am

I'm sure others will chime in with more detailed information. That said, we are basically on the same page as you but with no pension and a few years older.

Depending on the pension payout I would be careful increasing the % of withdraw rate. The rest of your plan seems to be on the right page. For us taxable first, dividends follow by any sales of funds to makeup any shortfall. Next 401K and tIRA's, including any RMD's when needed. Roth accounts will be the last to be tapped. Hopefully solid growth during those years of taxable and traditional withdraws. Anything left over is for legacy... That's the plan anyway. Hope that helps.

ndnboy
Posts: 83
Joined: Tue Apr 17, 2018 5:16 am

Re: How do you prepare for and start withdrawal stage....

Post by ndnboy » Tue Oct 23, 2018 7:45 am

annielouise wrote:
Tue Oct 23, 2018 7:23 am
How good are your Excel skills?

You can set up a spreadsheet that allows you to play with these numbers and determine the best strategy. Mine has one worksheet just for calculating RMDs and a second that calculates income needs and where it draws from (and how long money will last). Of course much is guesswork, so I try to leave a good error margin.
lol, not good at all,will google or ask wife to attempt, Thx.
B. Wellington wrote:
Tue Oct 23, 2018 7:26 am
I'm sure others will chime in with more detailed information. That said, we are basically on the same page as you but with no pension and a few years older.

Depending on the pension payout I would be careful increasing the % of withdraw rate. The rest of your plan seems to be on the right page. For us taxable first, dividends follow by any sales of funds to makeup any shortfall. Next 401K and tIRA's, including any RMD's when needed. Roth accounts will be the last to be tapped. Hopefully solid growth during those years of taxable and traditional withdraws. Anything left over is for legacy... That's the plan anyway. Hope that helps.
No Roths due to income levels, would be nice to have that as an option as well. Is there an ideal % break down when drawing from taxable and TSP/401k?

ndnboy
Posts: 83
Joined: Tue Apr 17, 2018 5:16 am

Re: How do you prepare for and start withdrawal stage....

Post by ndnboy » Wed Oct 24, 2018 8:10 am

Any additional suggestions...... thx

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