Retirees: What are you doing about withdrawing?

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tennisplyr
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Retirees: What are you doing about withdrawing?

Post by tennisplyr » Thu Jun 08, 2017 7:13 am

Am retired about 6 years and find my withdrawals are all over the place. Sometimes I don't withdraw at all for a long while, sometimes I withdraw varied amounts when I need it. Was wondering of those of you who are in the withdrawal phase, do you have a systematic strategy? Do you take out money at regular times, in constant amounts, etc? Also, what do you usually use these withdrawals for?
Those who move forward with a happy spirit will find that things always work out.

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Re: Retirees: What are you doing about withdrawing?

Post by Ron » Thu Jun 08, 2017 7:46 am

If you have a monthly (or any cycle) budget, it's simple.

I/wife withdraw from our respective TIRA MM account, paying FIT at the time of withdrawal (no state/local income tax in our area). My wife's budget is static and she has an auto-withdrawal from her VG account on the 25th, deposited to her checking by the 27th. My budget is variable so I'll do a monthly budget withdrawal from my VG/FIDO TIRA MM account, also paying FIT monthly.

Any big ticket items (such as we had done to our home this week for the tune of $14k) are handled in the same way. Withdrawals are made and FIT paid at the same time.

We don't "pre-load" our spendable cash on an annual basis as a lot of folks do, taking out one lump sum. I did this the year I retired (a decade ago) but since spending is not always static, it's easier to do the monthly expense basic withdrawal, supplemented by additional withdrawals for big ticket items, such as major house renovations or purchase of a vehicle (three since we've retired - all paid for in cash).

Our VG/FIDO MM TIRA accounts are replenished throughout the year, by selling off profits as they occur (within a 5% gain against the base holding) and either have it go to our MM account or reinvested as part of our ad hoc rebalancing. We don't re-balance on a set schedule but rather as the market and our funds change in value. Since we currently hold 3-4 years in our respective TIRA MM accounts, paying for a big ticket item is no problem nor are withdrawals a problem when the market dips such as it did in 2008-09. That will change next year when we each start our age 70 SS plus excess RMD's (e.g. RMD's required by law, not necessarily needed to fund our expenses) since our TIRA MM cash will be minimal. While we will reinvest excess RMD's in taxable funds, we'll keep a bit of additional cash in taxable MM to cover those big ticket items as they come. While holding cash is considered by many to be foolish due to the current return, I/we would rather have that available rather than draw from a bond fund that certainly can fluctuate in value over the short term, when we may need that money for expenses.

Since you asked...

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Re: Retirees: What are you doing about withdrawing?

Post by The Wizard » Thu Jun 08, 2017 7:55 am

I'm retired just over four years, starting at age 63. Bulk of my assets was tax sheltered 403(b) to start with.
I annuitized a goodly portion to start with, thus giving me a base monthly income that more than covers my expenses.
Additionally, I have a systematic withdrawal of a few thousand per month in lieu of SS at age 70. I soon changed most of this to be a systematic monthly Roth conversion, still taxable income obviously.

My withdrawal scheme is guided by a spreadsheet I put together a while ago that projects my AGI year by year till age 75. The idea is to take more taxable income prior to age 70 and the start of RMDs, so that the increase in AGI that year isn't too big.

Since the stock market has done well over the past few years, I've increased my income a bit and have begun putting excess income into VTSAX in my taxable account.
And when December comes, I may do an additional lump sum Roth conversion, with an eye on avoiding the next higher Medicare tier.

Most actual spending, including travel expenses, is just paid out of checking, where I keep a decently high target amount. But when the time comes to replace the Mustang in a few years, I'll liberate some cash from my taxable account and possibly my Roth IRA...
Last edited by The Wizard on Thu Jun 08, 2017 8:17 am, edited 3 times in total.
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Re: Retirees: What are you doing about withdrawing?

Post by 2beachcombers » Thu Jun 08, 2017 7:59 am

Retired 17 yr. Only withdraw dividends from taxable account.
Ability to do this was waiting till 70 for SS, Pension and controlling expenses

jerry

earlyout
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Re: Retirees: What are you doing about withdrawing?

Post by earlyout » Thu Jun 08, 2017 8:05 am

For the past 15 years, since I have been retired, my practice has been to replenish the checking account 2-3 times a year as the need arises. One of these times is when I take the RMD from my IRA and all occasions are accompanied by rebalancing to our desired asset allocation. Our expenses vary considerable from month to month so any type of systematic withdrawal would not work very well. I also find it less time consuming to only go through this exercise a couple of times each year.

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Re: Retirees: What are you doing about withdrawing?

Post by wolf359 » Thu Jun 08, 2017 8:11 am

Ron wrote: Any big ticket items (such as we had done to our home this week for the tune of $14k) are handled in the same way. Withdrawals are made and FIT paid at the same time.
You just gave me an interesting thought.

When adding a large amount of money to your portfolio, the standard advice is to invest it as a lump sum, rather than dollar averaging. The reason is that the market tends to climb over time, so 2/3 of the time, it's beneficial to invest early and let the market work for you.

When withdrawing a large amount of money from your portfolio, it may make sense to do it in reverse, that is, dollar cost average the money out prior to the expected expense. That way more of your money is in the market longer. If done over the end of a tax year, it may also have benefits by splitting the income between two tax years, reducing overall income.

Hmm. I'll have to play with some numbers. Does anybody do it that way?

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Re: Retirees: What are you doing about withdrawing?

Post by Volkdancer » Thu Jun 08, 2017 8:28 am

I take the easiest possible approach for me. Since all my estimated expenses for the year, including federal and state income taxes, are more than covered by the RMD and what I receive from Social Security after the WEP deduction, I have the RMD less withholding for federal and state income taxes transferred to my Fido Cash Management account within the first week of the new year. I then transfer the whole amount to a high (relatively) interest online savings account. From that savings account I transfer monthly my budgeted amount for that month. That way I do not have to think about it until next year, unless there is an unusual, one-time expense. That is paid from the accumulated under budget amount first and second from taxable savings. For me, the important thing is to remove the whole amount from my investment portfolio.

Karl V

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Re: Retirees: What are you doing about withdrawing?

Post by John Z » Thu Jun 08, 2017 9:04 am

Hi OP,
Retired 5 years this end of June. Knowing that we would have to withdraw different amounts during different years, wanted to keep a paper guideline of what we were doing to have some reference since retirement balances are constantly changing.

Using a simple spreadsheet, every end of quarter we fill in this spreadsheet.

Column 1: End of Quarter Date
Column 2: IRA Grand Total (including Roths)
Column 3: 1% Withdrawal Guideline
Column 4: Running total of Available Withdrawal Amount
Column 5: Actual withdrawal amount
Column 6: Balance of Available Withdrawal - If overdrawn put in parenthesis
Column 7: We call Cash but it is all of our taxable total plus checking accounts
Column 8: Grand Total (includes IRAs and Cash
Column 9: Notes

This gives us a clear and complete history of what we have withdrawn and how we are doing along the 4% withdrawal strategy. Now that we are in RMD territory it makes it necessary to keep track of those amounts also.

Naturally there are different strategies on where to withdraw from but that's another topic. We use McClung's Prime Harvesting method.

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Re: Retirees: What are you doing about withdrawing?

Post by dkturner » Thu Jun 08, 2017 9:41 am

We reinvest all of the dividend and interest from our taxable investments and withdraw our RMDs (net of income tax withholding) in early December and have the cash deposited in our taxable money market fund account. We estimate how much of the net RMD amount we will need for the following year to supplement our Social Security and pension income and how much of an additional balance we want to hold in the money market fund. Any surplus gets invested in his/her taxable accounts.

retire57
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Re: Retirees: What are you doing about withdrawing?

Post by retire57 » Thu Jun 08, 2017 10:17 am

2beachcombers wrote:Retired 17 yr. Only withdraw dividends from taxable account.
Ability to do this was waiting till 70 for SS, Pension and controlling expenses

jerry
Same here. Retired 1.5 years with 2 pensions, pre-SS.

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Re: Retirees: What are you doing about withdrawing?

Post by ralph124cf » Thu Jun 08, 2017 10:57 am

Generally, you will pay the least total taxes if you can keep your taxable income constant throughout retirement. If the bulk of your retirement assets are in tax deferred vehicles, then calculate what your income will be after you start SS, any pension and annuity income, plus RMD income, plus any other taxable income such as rents, royalties, and interest and dividends from taxable funds. If you retire at age 60, and plan to start SS and a pension at age 70, to keep income constant you would need to take more than the age 70 RMD from your tax deferred account. Note: When I say "take" I am including any ROTH conversions that you would choose to make, and assuming that any withdrawn amounts above desired spending are invested in a taxable account in a tax efficient manner.

Ralph

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Re: Retirees: What are you doing about withdrawing?

Post by wrongfunds » Thu Jun 08, 2017 11:24 am

Don't you guys try to "time" the withdrawal? I remember when I was taking the money out of 529 for college tuition, I used to look at the market numbers daily before taking the money out as the semester bill was due. I doubt if it made any substantial difference but I was trying to find the "best" day to liquidate part of the account.

I suspect the best strategy should be to do this automatically without looking at the market. Otherwise, you are putting through unnecessary emotional grinder.

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Re: Retirees: What are you doing about withdrawing?

Post by Sbashore » Thu Jun 08, 2017 12:25 pm

I calculate a "budget" amount I can withdraw based on average portfolio value over three years, next years estimated dividends and my life expectancy. It varies with my portfolio value, but very little given my computation method.
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Re: Retirees: What are you doing about withdrawing?

Post by Dandy » Thu Jun 08, 2017 1:34 pm

1. I have and am funding the wait to collect SS at age 70 with Savings, CDs and taxable distributions to supplement my pension and wife's SS.
2. I have pension and SS sent to a online Savings account and do 2 transfers per month to our checking account - mimicking former salary type timing - to fund monthly expense.
3. Taxable funds are set to cash not reinvest and eventually feed the Savings account
4. When I collect SS and RMD next year I will direct proceeds in a similar manner.
5. My RMD withdrawals will be all or most from fixed income when equities do poorly and all or most from equities when they do well.
6. Any extra will fund gifts to family, charity or fund unusual expenses.

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Re: Retirees: What are you doing about withdrawing?

Post by SGM » Thu Jun 08, 2017 1:47 pm

TIAA-CREF account was annuitized. Roth accounts are reinvested and untouched. All dividends and mutual fund capital gains are put into checking. Occasional sales of long held stocks are used for large purchases or other obligations. Other income streams go into a checking account for disbursement.

We don't keep track of the amounts of withdrawals as long as portfolio continues to grow which has been the case in the 3 years since I retired. If the portfolio drops in value we will limit withdrawals to some safe rate. However, this will have no effect on our lifestyle.

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iceport
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Re: Retirees: What are you doing about withdrawing?

Post by iceport » Thu Jun 08, 2017 3:01 pm

wolf359 wrote:When adding a large amount of money to your portfolio, the standard advice is to invest it as a lump sum, rather than dollar averaging. The reason is that the market tends to climb over time, so 2/3 of the time, it's beneficial to invest early and let the market work for you.

When withdrawing a large amount of money from your portfolio, it may make sense to do it in reverse, that is, dollar cost average the money out prior to the expected expense. That way more of your money is in the market longer. If done over the end of a tax year, it may also have benefits by splitting the income between two tax years, reducing overall income.
Actually, I would be far more tempted to use a constant share approach, which would seem to have advantages over "reverse DCA" in the withdrawal phase.

During accumulation, DCA — buying a constant dollar value — results in buying more shares when prices are low, and buying less shares when prices are high. So far so good!

But during the withdrawal phase, selling a constant dollar value will result in selling more shares when prices are prices are low, and selling less shares when prices are high. That's nothing we should aspire to.

Selling a constant number of shares sidesteps that problem, and simply yields more cash when prices are high and less cash when prices are low. That has it's own drawbacks, to be sure. But it wouldn't tend to drag portfolio performance as much as "reverse DCA" might.

I'm just retired two months now, so I don't have a formal approach yet, and an annuitized income stream for base expenses allows a great deal of flexibility. I also have roughly 5 years worth of theoretical (4%) annual withdrawals in a stable value fund earning a decent yield. If spent, that will need to be replenished. But I haven't settled into a strategy yet.
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Re: Retirees: What are you doing about withdrawing?

Post by jebmke » Thu Jun 08, 2017 3:13 pm

Most of our expenses are charged to credit cards or are direct debits scheduled for the beginning of the month. The largest exception is our estimated tax payment. Normally I look at the CC statement online toward the end of the month. With that info, I pretty much have what I need to know to schedule a transfer from VG. I normally sweep any cash sitting there from dividends and if that isn't enough, I sell something. I try to keep my cash balance pretty low.
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Re: Retirees: What are you doing about withdrawing?

Post by jebmke » Thu Jun 08, 2017 3:14 pm

wrongfunds wrote:Don't you guys try to "time" the withdrawal?
I try to time it just before the major expenses hit so I am not sitting on cash for very long.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Retirees: What are you doing about withdrawing?

Post by bertilak » Thu Jun 08, 2017 3:41 pm

I only take it out as I need it. This is possible because I need it only rarely. Pension and SS have me covered for normal expenses and that stuff lands in my checking account automatically.

When I need extra it is usually for an unplanned expense (new septic system, European trip to attend a wedding, family member's sudden medical expense, etc.). Once in a while I actually put money back into my portfolio to (partially) make up for money I took out earlier.
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Re: Retirees: What are you doing about withdrawing?

Post by FactualFran » Thu Jun 08, 2017 3:52 pm

My "systematic strategy" is at the end of every month: move enough money from my investment accounts to my spending account so the spending account has enough money for the next month's worth of spending. I manage the investment accounts to try to have enough in money market funds to cover the usually monthly spending. I use the spending account to: pay periodic bills (such as utility bills), pay the current credit card bill, pay current taxes, get cash from an ATM for purchases to be paid in cash.

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Re: Retirees: What are you doing about withdrawing?

Post by SeeMoe » Thu Jun 08, 2017 5:05 pm

We've been retired now going on 22 years and continue to invest in a 40/60 AA (was 60/40 until a few years ago.) Since our pensions more than cover our expenses, we seldom dip into our investments and just use the year end RMD's on occasion for big ticket items. Keep about $20k in a bank for monthly expenses.

SeeMoe.. :dollar
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Re: Retirees: What are you doing about withdrawing?

Post by bigred77 » Thu Jun 08, 2017 5:31 pm

Interesting to see the mechanics of what people are doing in practice.

I am not retired or withdrawing anything, but my general plan is to rebalance the portfolio once a year (I do not have bands, I just do it annually). At the time I rebalance, I would sell assets to generate 12 months worth of cash and consolidate that into a separate savings account, essentially making my "withdrawal" for the year all at once. I would also take any funds out of tax advantaged accounts at this time, handle any Roth IRA conversions for the year, and handle any tax loss harvesting. Basically handle all transaction once a year, probably in and around December, so I can do some informed tax planning beforehand and be fairly comfortable nothing out of the ordinary would arise before the end of the year. Then my plan is to make semi-monthly transfers to my spending accounts, essentially recreating a standard paycheck as if I was still working. Any annuities, SS, or other income streams would feed into that savings account and would already be budgeted out over my planned yearly spending.

I don't know if I would be comfortable with multiple months worth of spending just sitting in my checking account. I know myself, I would be tempted to overspend. I feel like that money would be burning a hole in my pocket.

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Rob54keep
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Re: Retirees: What are you doing about withdrawing?

Post by Rob54keep » Thu Jun 08, 2017 10:09 pm

Now at age 63. I withdraw from my 401k monthly along with some after tax funds. I am also doing Roth conversions up to the top of the 15% bracket. Taxes are covered by withholding from the 401k withdrawals. I rebalance to 40/60 and that allows me to sleep so good.

Awaiting any tax changes in Congress and then adjust accordingly. I'll probably start SS at FRA (66) but perhaps 70 depending on any potential tax or SS changes. Small income from online college teaching helps pay pre-65 medical insurance.

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Re: Retirees: What are you doing about withdrawing?

Post by itstoomuch » Thu Jun 08, 2017 10:46 pm

Income Stream Buckets: 1) SS+small pension (nonCola); 2) Rental; 3)began 2017 deferred GLWB annuity because RMDs which does into Discretionary taxable Bucket #4.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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Re: Retirees: What are you doing about withdrawing?

Post by Sheepdog » Thu Jun 08, 2017 11:50 pm

I have been retired almost 19 years living off of investments and SS only. (I took a modest pension as a lump sum.) I withdraw as needed, but discipline of withdrawal amounts and timing was required. The money must last. It has and will.
My goal was to average 4.5% a year withdrawal and not adjust for inflation....have more, I can take more,...have less, I must try to reduce spending, and, hopefully, any reduction would be from discretionary spending wants, not needs. It has. I keep records of annual withdrawals and calculate a maximum withdrawal goal for the next year based on account balances and past withdrawal history. If I didn't spend that goal, the extra goes into a grown balance. The history of withdrawals has worked out as my average withdrawal is 4.59% to date with actual withdrawals from 3.11% to 7.59% and the nest egg has grown I can buy a new car, house remodel, take a nice cruise as long as I am reasonably within the ongoing average history. It has worked wonderfully.
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Re: Retirees: What are you doing about withdrawing?

Post by SpaceCowboy » Fri Jun 09, 2017 2:18 am

Retired early 4 years ago. No pension. SS will wait till 70. Thus, my income is pretty much solely funded by withdrawals from taxable accounts.
Withdraw half the annual amount every six months into interest bearing online account. Generally use VPW amount or lower. Have done this in the past by rebalancing toward targeted AA, but after reading McClung am seriously considering changing to Prime Harvesting, which is essentially Bonds First, with an occasional rebalance into Fixed Income.
Think you should take a serious look at McClung's book. Highly worthwhile for anyone developing or re-examining their withdrawal strategy, especially those of us without a pension who are primarily reliant on our accumulated investments to fund retirement.

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Re: Retirees: What are you doing about withdrawing?

Post by xxd091 » Fri Jun 09, 2017 4:10 am

Hi All
From across the Pond-UK but an avid Boglehead!
Retired 14 years-my method!
I have a Quicken 2004 still in operation.Run in tandem with my BankAccount,Pension and Savings Accounts.
My wife who is not interested in running money sees the Home Page every time she loads an expenditure-done every few days-she does most of the day to day spending-we use Visa Credit and pay off every month
Home Page set up so shows value of all our Bank Accounts/Savings and Pension amounts.Also shows a running yearly expenditure total
No arguments re money-because there it is in constant full view -as I tell her once that is spent there is no more!
I set the rough yearly Withdrawal amount we can sustain-currently 3.8%
We both stick to it. I keep about one and a half yearly expenditure in cash as a Float-replenish from Savings and Pensions as required.Float replenishes Bank Account as required
I note over the years that if I say times are good -we can spend a little more-we up the yearly Withdrawal amount and vice versa
I do worry if I die or become incapacitated that she will cope but am training my son in law-luckily a banker-to take over the reins if require !
xxd091

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Re: Retirees: What are you doing about withdrawing?

Post by ColoradoRick » Fri Jun 09, 2017 9:20 am

1) we put all our tax deferred retirement assets in Vanguard.
2) went to automatic withdrawals and replicated my paycheck 1x/month less SS
3) repeat
4) deal with one time issues (house painting) as needed

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AtlasShrugged?
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Re: Retirees: What are you doing about withdrawing?

Post by AtlasShrugged? » Sat Jun 10, 2017 7:08 am

I have some questions for the retirees.

One, do you use VPW?
And if so, how do you make that work with RMDs?
Do you dump any excess into taxable accounts? [meaning, if your RMD is greater than expenses, what do you do?]

Two, several posters mentioned withholding FIT. How does that work in practice?
Do you pay taxes as you go, put your estimated tax in an account to pay at tax time?

Three, was your FIT tax bill higher, or lower than what you thought it would be?
“If you don't know, the thing to do is not to get scared, but to learn.”

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Re: Retirees: What are you doing about withdrawing?

Post by The Wizard » Sat Jun 10, 2017 7:53 am

JCE66 wrote:I have some questions for the retirees.

One, do you use VPW?
And if so, how do you make that work with RMDs?
Do you dump any excess into taxable accounts? [meaning, if your RMD is greater than expenses, what do you do?]

Two, several posters mentioned withholding FIT. How does that work in practice?
Do you pay taxes as you go, put your estimated tax in an account to pay at tax time?

Three, was your FIT tax bill higher, or lower than what you thought it would be?
Good questions.
I don't use VPW, per se, but I do adjust my income projection spreadsheet for coming years each January based on actual market performance. And to the extent my tax deferred balance is higher, that impacts my projected RMDs starting in 2020.

I do try to manage my AGI in my late 60s so that the jump in 2020 won't be too big. This typically means doing Roth conversions to get my AGI up closer to what it will be in three years.
Additionally, I annuitized an additional amount for lifetime monthly income this year, thus reducing my tax deferred by a nice chunk.

I'm already putting excess income into VTSAX in my taxable account. So when RMDs start in three years it will be almost a seamless transition.

I manage income tax withholding on a monthly basis with a layered approach. This means that early income streams have less withheld and that income streams starting later have more withheld. The annuity income I started this year, four years into retirement, has 28% FIT withholding.
With this approach, I hit my total FIT obligation pretty closely, a small refund for 2016.

If I do a lump Roth conversion this December, I'll send in a one-time 28% estimated payment to cover that...
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Re: Retirees: What are you doing about withdrawing?

Post by 2015 » Sat Jun 10, 2017 2:13 pm

bigred77 wrote:Interesting to see the mechanics of what people are doing in practice.

I am not retired or withdrawing anything, but my general plan is to rebalance the portfolio once a year (I do not have bands, I just do it annually). At the time I rebalance, I would sell assets to generate 12 months worth of cash and consolidate that into a separate savings account, essentially making my "withdrawal" for the year all at once. I would also take any funds out of tax advantaged accounts at this time, handle any Roth IRA conversions for the year, and handle any tax loss harvesting. Basically handle all transaction once a year, probably in and around December, so I can do some informed tax planning beforehand and be fairly comfortable nothing out of the ordinary would arise before the end of the year. Then my plan is to make semi-monthly transfers to my spending accounts, essentially recreating a standard paycheck as if I was still working. Any annuities, SS, or other income streams would feed into that savings account and would already be budgeted out over my planned yearly spending.

I don't know if I would be comfortable with multiple months worth of spending just sitting in my checking account. I know myself, I would be tempted to overspend. I feel like that money would be burning a hole in my pocket.
You just described the exact methodology I use, including roth conversions, except my annual spending withdrawals come from taxable due to delaying SS. This annual lump sum is invested in an ALLY savings account, from which I transfer monthly the next month's spending needs in advance into my (non-interest bearing) checking account during bill paying. TLH is done throughout the year as the opportunity arises. I try to keep everything simple and replicating a monthly paycheck does this. I am no fan of VPW and am satisfied with at age 62 with a 40/60 AA, 8 years in bonds until age 70 currently, and beyond that a substantial lump sum coming online in a few years. SS and RMD's at 70 more than meet spending needs, at which time I may raise the AA to 50/50 for no other reason than I can.

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Re: Retirees: What are you doing about withdrawing?

Post by LeeMKE » Sat Jun 10, 2017 2:37 pm

We have one (or two) more years of contributions to the portfolio and then are launching into withdrawals.

I setup a study program for myself to tune up our strategy in retirement.

From my ISP:
REBALANCING
In 2017 we will rebalance in June and December. At retirement, we will switch to rebalancing according to Living Off Your Money worksheet. If that worksheet is unavailable, we will rebalance every 4 years, around the Presidential election. (Jim Otar: Unveiling the Retirement Myth)

WITHDRAWALS
My plan for setting the withdrawal amount each year is to run three analyses and then choose an amount among these results:
Optimal Retirement Planner http://www.I-ORP.com (best for tax strategy, which account to take from each year)
Fidelity Income Planner http://www.Fidelity.com (easiest to understand with excellent graphics)
Living Off Your Money worksheet http://livingoffyourmoney.com/home/more (Prime Harvesting approach to asset management)

We have a 2 year CD ladder set up, which holds at least 2 years withdrawals. Morningstar recommends 2 years withdrawals in CDs, and that seems correct to me. Every year, calculate the future 2 years of withdrawals, and be sure to have at least that amount in CDs. Right now, I estimate we have 4 years in CDs, which is fine for the time being.

Refill CDs from Bonds, unless we are selling stock during a rebalance. Allow stocks to increase as a percent of the portfolio (see Rebalancing).
REASONING
I believe variable withdrawals will work best for us, but now I need a specific way to make these variable withdrawals.
Running out of money is the primary threat.
Sequence of Returns causing us problems is the secondary threat.
Spending too little in the early years of retirement is the third greatest threat.

Some tools I tried out were too much "black box" and gave me pause because I couldn't be confident about what is under the hood.
Some tools I tried were too complex, magnifying a small error that could be a serious problem to catch.
Some approaches were so conservative we'd be too tight entering retirement and I know we'd end up with a pot of cash we didn't spend.
Some approaches were too aggressive, leaving me wondering how much I'd have to throttle back spending later in retirement.

I chose 3 tools that closely correlate (right now), are easy to use (so high confidence of no user error). I figure if I stay within the bounds of these 3 annual withdrawal amounts, I'll be good. Once we get deeper into retirement, I expect our annual expenses will slow down to the point that withdrawals won't be a very high percent of the portfolio, in which case, any method will work. But I'll use extra care during the early years, to both withdraw as much as possible, but not too much.
The mightiest Oak is just a nut who stayed the course.

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