AA repaired--New Q: How to structure drawdown?

[robindbee]

Thanks to really helpful fellow Bogleheads, I am back on track with my asset allocation 60 stock/40 bond and I feel comfortable and the ease of just two funds for foreseeable future. I am 69.
Now, if I want to draw down 3-4% annually (or monthly or weekly?) From which fund do I draw? And timing, so I drawdown my % annually, let's say Jan of every year? Or quarterly or monthly? And do I do it automatically (set up a tool w VG) or what? Prior to this dip, I was just taking what I considered "profit", sort of randomly as I needed it, but I know that's not best method. For 2022, for the first time, instead of reinvesting all dividends and cap gains, I took them in Dec 22, stuck them in MM and taking as I need. I switched elections back to reinvest.
Any concrete suggestions?
Many thanks.



Current portfolio =$443k. 4% drawdown = $22k annually.

Taxable Brokerage at Vanguard 06% of current portfolio; $27k)
06%, $27k, Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%

traditional IRA at Vanguard (53% of current portfolio; $237k)
18%, $80K, Vanguard Bond Stock Market Index Fund (VBTLX) ER 0.05%
35%, $190k, Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%

Roth IRA at Vanguard (19% of total portfolio, $82k)
19%, $82k, Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%

TIAA TRAD (22% of current portfolio; $97K)

[LadyGeek]

This thread is now in the Personal Finance (Not Investing) forum (retirement planning).

The OP's portfolio questions are here: Are these funds too similar to have both? If not, which one should I keep? [And request for portfolio review.]

[tennisplyr]

There are lots of threads on drawdowns, just do a search here.

[HomeStretch]

Your different account types (taxable, tax deferred and Roth) give you flexibility on where to draw most tax-effectively. You may need to do multi-year financial modeling to determine the best combo to draw the $44k/year from and that combo may change annually. The goal is to try level your combined tax rate over your years in retirement in order to maximize your after-tax $.

[livesoft]

The OP probably doesn't pay any Federal income taxes at all. If they do, they can probably structure things so that they don't.

In the absence of more info from the OP my preference would for the OP to just keep doing what they were doing and would be to keep on doing ad hoc withdrawals from wherever except the Roth. The tax-deferred IRA could be used to make Roth conversions up to some level of taxable income, say the 0%-taxed level. And maybe even annuitize the TIAA traditional to guarantee payouts until death.

[sycamore]

The OP probably doesn't pay any Federal income taxes at all. If they do, they can probably structure things so that they don't.

In the absence of more info from the OP my preference would for the OP to just keep doing what they were doing and would be to keep on doing ad hoc withdrawals from wherever except the Roth. The tax-deferred IRA could be used to make Roth conversions up to some level of taxable income, say the 0%-taxed level. And maybe even annuitize the TIAA traditional to guarantee payouts until death.

Turns out there is more info from the OP. From another thread:

...
Income: SS $24K PA
Need to use approx 4% drawdown to meet monthly expenses and desired travel needs
DEC 2022 first time I took dividends and cap gains and I think I want to continue doing that for now to close gap

Single/Fed Tax 12%

OP, as livesoft said it's not clear how you got into the 12% fed tax bracket.

You have $24K in Social Security, but some/all of it may be non-taxed depending what your other taxable income is.

Do you have savings accounts / CDs / etc. that pay out interest? How much?
In the past did you take Traditional IRA withdrawals? How much?
Are you taking withdrawals from the TIAA Trad? Are any of them required? How much?

It would help to know what you've done in the past so we can compare/contrast your options going forward.

[robindbee]

"OP, as livesoft said it's not clear how you got into the 12% fed tax bracket."

Mistake, 10% bracket. My SS not taxed so after standard deduction I am at 10%, not 12%. I don't withdraw from Tiaa TRad. Past few years since retirement in Oct 2018, I've been using various funds to meet what I need monthly, and with Covid shutting things down for 2 years, have spent very little money. My rent is quite low and my only big expenses are for my own travel (which I adjust according to funds) and helping adult daughter out (she move cross country to west coast and I helped subsidize initially). This year, 2023, my main financial needs are covered with SS and withdrawals I plan again to use for traveling.
I have thought about annuitizing my Tiaa Trad, but I'm 69 now and age 73 RMD will fill gap, so is there reason for annuitizing I'm not thinking of?
I probably will continue to reinvest dividends/cap gains and withdraw quarterly or end of year, like I did this year. Dividends/cap gains earned me about !4K for 2022.
Thank you for input and continue making suggestions if needed!