Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Income Withdrawal Strategies
Old 11-05-2019, 01:35 PM   #1
Dryer sheet wannabe
bfrank12's Avatar
 
Join Date: Apr 2018
Posts: 12
Income Withdrawal Strategies

Hello I would like to ask if anyone has use the incomesStrategy.com website?
I have used the Maxi Planner which calculated income taxes and Medicare B premium from the current portfolio and income history.

I would like to find out which is the most effective withdrawal strategy, to minimize tax and ask about cost for healthcare insurance.

Is is preferable to buy both Medicare B and FEHB healthcare insurance?
Expected Medicare B premium $189.60 and FEHB health insurance $384 per month.

The following article proposed 3 withdrawal strategies:
Withdrawal Strategy Longevity of Financial Portfolio
Strategy 1: 401(k) then Roth IRA then taxable account 30 years
Strategy 2: Taxable account then 401(k) then Roth IRA 36.17 years
Strategy 3: Withdrawals each year from taxable account
and 401(k) and then Roth IRA and 401(k)
37.5 years


What does real live experienced withdrawal strategy showed or compared to the above?

Thanks for any imputs.
__________________

bfrank12 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-05-2019, 01:50 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: NE Ohio
Posts: 1,202
Your URL doesn't exist. If you meant incomestrategy.com, the site looks like too much of a hard sell to me. You'll get some good answers from forum members here, with more detailed information (tax brackets now and in future, etc.). Otherwise, the proposed strategies you list don't necessarily make sense.
__________________

gwraigty is offline   Reply With Quote
Old 11-05-2019, 03:12 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: NE Ohio
Posts: 1,202
Oops, just realized, probably because of the invalid URL, that Income Strategy has already been extensively tried out and discussed here:

Retirement Tax Planning - Income Optimization?
gwraigty is offline   Reply With Quote
Old 11-06-2019, 07:41 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 9,587
Quote:
Originally Posted by bfrank12 View Post

Is is preferable to buy both Medicare B and FEHB healthcare insurance?
Expected Medicare B premium $189.60 and FEHB health insurance $384 per month.

I don't have anything to add on withdrawal strategy but you tossed in this question about Medicare Part B so I will pipe in on that. Well over half of Feds take part B and use FEHB as their supplement. I am one of the ones who did not. If you don't take it and change your mind later you will pay a significant penalty to take Part B. On the upside you will save all the Part B premiums and will be in the same boat for medical coverage as you were when working - same cost, same co-pays, same deductible, same catastrophic limits (although you can't opt for an HSA). Since our Part B premiums will skyrocket when DW's RMDs kick in, we figure we are better off with FEHB alone.

On the Part B side,the big PPO FEHB carriers like BCBS and GEHA offer to drop all co-pays and deductibles and to pay out of network doctors if you pop for Part B. That reassures a lot of old folks but you need to do the math. If you use an HMO for your FEHB plan I am not sure how they deal with out of network doctors.

When I retired 15 years ago I attended a meeting with the guy who writes the annual FEHB Consumer Checkbook plan guide. For what it's worth he said skipping Part B is a no brainer.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 11-06-2019, 08:32 AM   #5
Recycles dryer sheets
 
Join Date: May 2017
Posts: 437
Leaving the Roth as the last source to be tapped doesn't seem prudent for an early retiree.
brokrken is offline   Reply With Quote
Old 11-06-2019, 01:38 PM   #6
Thinks s/he gets paid by the post
HNL Bill's Avatar
 
Join Date: Dec 2017
Posts: 1,738
Quote:
Originally Posted by brokrken View Post
Leaving the Roth as the last source to be tapped doesn't seem prudent for an early retiree.
For most people, I would disagree.

Many choose to leave the ROTH intact as long as possible to allow tax-free growth, and to allow tax-free distributions once the RMD age for other investments is reached, lowering your taxes then.

From age 59.5 to 70, one may want to take $ from tax-deferred accounts (and/or complete ROTH conversions, increasing the ROTH assets) to reduce taxes on RMDs later, when SS is also being taken.

For most, if you have both tax-deferred, and taxable accounts, tapping taxable accounts with LTCGs up to the appropriate 0% LTCGs tax bracket limit ($80K for MFJ in 2020) offers a much better choice than tapping ROTH first.
__________________
Balance in everything.
HNL Bill is offline   Reply With Quote
Old 11-06-2019, 02:31 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 2,075
To me the old mantra of never touching the principal has been supplemented with leave the Roth as a last resort. Provided you put the long term high growth investments in the Roth. I'll let you work the numbers for yourself.
__________________
Just plodding along on Dividends/Interest, SS and a very small pension.
foxfirev5 is offline   Reply With Quote
Old 11-06-2019, 02:38 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 24,387
Quote:
Originally Posted by brokrken View Post
Leaving the Roth as the last source to be tapped doesn't seem prudent for an early retiree.
Quote:
Originally Posted by HNL Bill View Post
For most people, I would disagree. ...
+1 with Bill... best to leave Roths to last unless other withdrawal sources are pushing you into a really high tax bracket (higher than your ultimate tax bracket).
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA
pb4uski is offline   Reply With Quote
Old 11-06-2019, 07:54 PM   #9
Recycles dryer sheets
 
Join Date: May 2017
Posts: 437
Sorry, should have elaborated. My thought was around an early retiree trying reduce taxable income for ACA purposes. In that case, which will be mine, Iíd first hit taxable, then Roth and then TIRA once 65. Thatís the plan, but who the hell knows what healthcare will look like then
brokrken is offline   Reply With Quote
Old 11-06-2019, 08:35 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 5,008
Quote:
Originally Posted by brokrken View Post
Sorry, should have elaborated. My thought was around an early retiree trying reduce taxable income for ACA purposes. In that case, which will be mine, Iíd first hit taxable, then Roth and then TIRA once 65. Thatís the plan, but who the hell knows what healthcare will look like then
Many of us try to have enough just in taxable as the assistance in managing MAGI without using the Roth.
We lucked into it without even knowing about MAGI rules until retired.
__________________
TGIM
Dtail is online now   Reply With Quote
Old 11-06-2019, 09:02 PM   #11
Recycles dryer sheets
 
Join Date: May 2017
Posts: 437
Dtail. Thatís my plan, too. But if Iím short in the taxable thereís a small chunk in a Roth that Iíd tap before the TIRA.
brokrken is offline   Reply With Quote
Old 11-18-2019, 06:32 AM   #12
Dryer sheet wannabe
bfrank12's Avatar
 
Join Date: Apr 2018
Posts: 12
Thanks for all your input.
It gets overwhelming to figure out all the rules into retirement. When I listened the Morningstar Longview Podcast I realized that the big picture is to make it into early
retirement until we reached 70 yrs since there will be pension and both spouses Social Security income. The pension in our case is like an annuity and will help in longevity risk to 95 years.

In addition to trying to create a budget , the mental preparedness to transition into retirement is also a working effort on my part.
I find letting go of my inclination to work hard difficult because I feel the duty to provide financially for others as I know the income from work will.

Mentally doing what I want versus should/could requires great effort. Also I have been working on building mental and physical routine to transition into retirement. What activities will keep me feeling purposeful mentally? I feel that to continue doing my work at the current level is not healthy for my brain health because it can be stressful.

I am also trying to get all my health in order. Going to the dentist and having the implant done was probably $4000. I followed up on any health concerns. Swimming, learning yoga and learning hobbies is rewarding.

I understand that everyone has different portfolio and goals into retirement, therefore differing strategies. However, I truly appreciate the knowledge given so that I will understand the impact of differing options in retirement.

Preserving the ROTH will be my goal and I need to get more understanding on the different pro/cons coordinating health insurance w/ Medicare. If you budget for healthcare expenses in the portfolio and have catastrophic benefits in FEHB is this sufficient?
Thanks again and it is a joy to read everyone posts.
__________________

bfrank12 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
VG: dynamic withdrawal strategies Onward FIRE and Money 7 01-21-2011 04:31 PM
Portfolio withdrawal strategies compared DblDoc FIRE and Money 3 11-19-2008 01:28 PM
Are Asset Allocating Withdrawal Strategies a Reliable Retirement Funding Method? haha FIRE and Money 51 10-15-2008 09:01 AM
Variable Withdrawal Strategies chinaco FIRE and Money 2 03-11-2007 02:17 PM
Marketwatch Article on Withdrawal Strategies JLP FIRE and Money 11 04-26-2006 08:55 AM

» Quick Links

 
All times are GMT -6. The time now is 05:52 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×