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Old 08-14-2016, 05:36 PM   #41
Recycles dryer sheets
 
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Originally Posted by skipro33 View Post
Man, if the thought of withdraws are getting to you, just wait until you actually make one and they take another 25% for state and federal taxes!!

I realized, of course, that the money in my 401K, 457 and IRA was tax deferred, that I would have to pay taxes on those funds when I withdrew them, but that was academic. It wasn't until I made a $20,000 withdraw and my account dropped by $25,000 that I realized what my account was REALLY worth. I always thought of my $Millions$ as mine. It's not. A big chunk of it is the governments and they'll take their share out when I take my share out. OUCH!!

It feels like a built-in inflation; I want to buy a candy bar for a dollar but I have to withdraw a buck twenty-five to buy it. Oh, and that buck twenty-five? They take MORE taxes out of that at the cash register!! DOUBLE OUCH! 8% more. Now a buck twenty five buys me 92 cents worth of goods. I'd be happy to withdraw 92 cents to buy a candy bar, but I have to withdraw a buck twenty-five to buy the candy bar. Federal income tax, State income tax and State sales tax. OUCH, OUCH, OUCH!!
Ha - one reason we moved away from California! No state income tax in Texas!
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Old 08-15-2016, 07:49 AM   #42
Recycles dryer sheets
 
Join Date: Dec 2015
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Originally Posted by GreyDawg View Post
How does one get this service -- which is exactly what I need?

I have a Flagship representative who is, in general, pretty clueless and who pointed me to their Vanguard Personal Advisor Service to manage my portfolio, which is not what I want.

What specifically should I be asking for (and from whom) for the one-time lookover? I need help developing a strategy for creating an income stream and possibly rebalancing / tweaking for the retirement phase.

Thanks!
I retired only last October 2015 so maybe things have changed recently, but all I did was ask my Flagship representative for a one time evaluation. I made it clear that I did not want an ongoing advisor. At the time it said that you could get periodic evaluations on request as part of your Flagship services.

I was lucky though I guess. My rep, although recently trained, did a great job. I retired unexpectedly so I was not paying much attention to tax efficiency in the taxable account. I asked for a new portfolio with a 50/50 asset allocation, and tax efficiency. Also with help on the transfer of a few IRA's that were coming in to Vanguard.

I think they probably have a template for this kind of setup. My guess is that he ran my numbers through the Vanguard retirement simulation plotter, and, then set up the funds using one of the Vanguard templates as a model. At the end of it I had the list of funds and amounts for the taxable and nontaxable sides. I did all of the fund transfers myself in Jan.

Your needs may be more complex than mine. I don't know if you can request a different rep but my guy's name is Nick Zuzelo.
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Old 08-15-2016, 05:01 PM   #43
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Thanks. My scenario is almost identical to yours: I took unexpected early retirement in 2014 at 58, whilst I was still in my "education/pre-retirement" phase and not yet set up for the retirement phase.

Since my Flagship rep is clueless (or eager to sell the company's services) Ii will see if I can at least speak to Nick.
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Old 08-15-2016, 05:51 PM   #44
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No problem at all! Plans work and I work the plan.....

I take an increasing percentage of my Portfolio Every Year. I will never run out. Currently at 4.5% of Portfolio Balance.

Much safer than any fixed SWR, no matter how low the Percentage.
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Old 08-18-2016, 11:15 AM   #45
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I retired eight weeks ago at 59, 2 months and 28 days, not that I was counting. I may start taking a bit from my 401k next year as long as it keeps me in the 15% bracket. I could just spend down savings. My WR is 1.9%
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Old 08-18-2016, 11:27 AM   #46
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I could see myself having the same issue as the OP. That is withdrawing from the stash. I wonder if buying a managed payout fund would make it seem like a pension and less painful to withdraw.
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Old 08-18-2016, 11:32 AM   #47
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I could see myself having the same issue as the OP. That is withdrawing from the stash. I wonder if buying a managed payout fund would make it seem like a pension and less painful to withdraw.
That might work. For myself, I set up an automatic transfer from my Vanguard account to my checking account, simulating the "regular paycheck" I had while w*rking. That has done the trick for me for 11+ years, with no withdrawal symptoms.
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Old 08-18-2016, 12:05 PM   #48
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This
+1
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Old 08-18-2016, 12:06 PM   #49
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+1
Sorry, this said "my portfolio has gone up since I have been withdrawing but concerned about the upcoming bear market". I agree
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Old 08-18-2016, 04:09 PM   #50
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Originally Posted by skipro33 View Post
Man, if the thought of withdraws are getting to you, just wait until you actually make one and they take another 25% for state and federal taxes!!

I realized, of course, that the money in my 401K, 457 and IRA was tax deferred, that I would have to pay taxes on those funds when I withdrew them, but that was academic. It wasn't until I made a $20,000 withdraw and my account dropped by $25,000 that I realized what my account was REALLY worth. I always thought of my $Millions$ as mine. It's not. A big chunk of it is the governments and they'll take their share out when I take my share out. OUCH!!

It feels like a built-in inflation; I want to buy a candy bar for a dollar but I have to withdraw a buck twenty-five to buy it. Oh, and that buck twenty-five? They take MORE taxes out of that at the cash register!! DOUBLE OUCH! 8% more. Now a buck twenty five buys me 92 cents worth of goods. I'd be happy to withdraw 92 cents to buy a candy bar, but I have to withdraw a buck twenty-five to buy the candy bar. Federal income tax, State income tax and State sales tax. OUCH, OUCH, OUCH!!
You need to differentiate between what they withhold and what you actually end up paying as the difference can be significant.

For example, a married couple in California that withdraws $90k from a 401k would pay a total of $12,391 (13.8%) in income taxes; $9,488 (10.5%) federal and $2,904 (3.2%) California.... MUCH less that the amount withheld.

So if it is for a couple and you get $90k distribution and they withhold $18k then you would get a ~$7k refund when you file your tax return.

BTW, if they distribute $25k and you end up with $20k the withholding rate is 20%, not 25% ($5k/$25k = 20% or $25*(1-20%)=$20k).

I'm betting that you avoided a lot more than what you will end up actually paying in tax when you deferred that income.... so you are way ahead and have nothing to rant about. Besides... you're the one who choses to live in California.
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