Age: Mother is 69 yo. Relatively healthy with her older siblings still living and in good health. Parents lived to 80.
Retired and Not Working
Updated 60% tIRA / 30% Roth & 10% Brokerage
75% Stocks / 25% Bonds - Sliced and Diced in 12 different index funds
Everything has been transferred to her name (was split before) and she should have received the stepped up cost basis from my understanding of a discussion with Vanguard.
Updated-Not eligible for social security.
She also receives a lifetime pension (covers about a third of expenses), but without getting into too many specifics about budget, she needs her retirement accounts (650K) to produce $1,800 a month ($21,600 annual). Running this through the fire calc and using basic calculators I feel pretty comfortable that she won’t run out of money. 3.3% withdrawal rate at age 69.
They never needed to pull from the retirement accounts before so that is why it is aggressive on the stocks. I’d like to move this all over to a life strategy fund (leaning towards the 40% stocks, 60% bonds or may split so it is closer to 30% stocks, 70% bonds). I know I will lose some tax efficiency, but would like to make this as simple as possible for my mother, me and my sibling who can assist.
Now for the questions.
Does this withdrawal strategy seem good assuming over age 70.5? Not sure if she should use a monthly or yearly withdrawal.
- RMD from tIRA
- All of tIRA
- Brokerage Dividends (even if reinvested?)
- Capital Gains on Brokerage and any Roth taken
- Slowly over a year, or all at once?
- Vanguard should keep track of all of the cost basis, so there shouldn’t be any tax surprises, right?
- Any other tax implications with this rebalancing?