|
08-13-2016, 03:48 AM
|
#1
|
Recycles dryer sheets
Join Date: Apr 2016
Location: Marietta
Posts: 51
|
cash during retirment
we need to live off some of our savings for about 18 months after retirement.
I will need about 40,000 so should I
(1) withdraw from investments mainly the Bond funds ?
(2) have dividends and interests from funds go into cash?
(3) take 40,000 and put into a cash place.. but not making any interest?
would love some thoughts
thanks
|
|
|
|
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!
|
08-13-2016, 04:07 AM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2015
Location: Michigan
Posts: 5,003
|
You do not say how you have your current funds invested, taxable, IRA, etc. Without that info, I would say that you start with (2), and then withdraw from other accounts if needed so as to balance minimizing taxes and maintaining your AA.
__________________
"The mountains are calling, and I must go." John Muir
|
|
|
08-13-2016, 04:17 AM
|
#3
|
Recycles dryer sheets
Join Date: Apr 2016
Location: Marietta
Posts: 51
|
Quote:
Originally Posted by DrRoy
You do not say how you have your current funds invested, taxable, IRA, etc. Without that info, I would say that you start with (2), and then withdraw from other accounts if needed so as to balance minimizing taxes and maintaining your AA.
|
Funds IRA Roth 66,000
reg IRA 833,000 60% stocks 40% bo
|
|
|
08-13-2016, 07:44 AM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
|
Assuming that you are over 59 1/2, I would take from IRA... 1/2 in 2016 and 1/2 in 2017 to spread out the tax implications but taxes may not be an issue... you can keep it in an online savings account that pays ~1% and set up an automatic monthly transfer to your local bank account that you use to pay your bills.
__________________
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
|
|
|
08-13-2016, 08:11 AM
|
#5
|
Recycles dryer sheets
Join Date: Apr 2016
Location: Marietta
Posts: 51
|
Quote:
Originally Posted by pb4uski
Assuming that you are over 59 1/2, I would take from IRA... 1/2 in 2016 and 1/2 in 2017 to spread out the tax implications but taxes may not be an issue... you can keep it in an online savings account that pays ~1% and set up an automatic monthly transfer to your local bank account that you use to pay your bills.
|
we will be 63 years old.. I am retired and husband will retire in March 2017..
so you are saying to take ?
|
|
|
08-13-2016, 09:50 AM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
|
I would leave Roth alone to continue to grow tax free for use later on or passing on to heirs.
Since you need $40k to live on for 18 months, you'll need to take from the tIRA. You could split the distribution between tax years to minimize your tax. Contrary to what I posted earlier, since your husband is still working you may want to wait until 2017 to do the distributions if you can since he'll have a full year of earnings in 2016 and only a quarter year in 2017... but how you approach it to minimize taxes depends a lot on your specific tax situation.
IMO, it doesn't matter much whether you take it out in one or two big chunks and keep it in an interest bearing savings account or just set up an automatic redemption of $2,250/month for the 18 months that you need it or any other withdrawal approach. Just remember to rebalance back to your desired AA within the tIRA.
__________________
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
|
|
|
08-13-2016, 09:57 AM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,094
|
Is this the last time you will need funds ?
If not, then in addition to what pb4uski said, you could turn off re-investment in the regular IRA, so dividends become cash, that way you would have a stream of income ($10,000 - $15,000 per year) regardless of what the stock market does in the next few years.
|
|
|
08-13-2016, 10:04 AM
|
#8
|
Thinks s/he gets paid by the post
Join Date: Apr 2012
Location: Nashville
Posts: 2,506
|
Agree with others, and as pb4uski said, it really doesn't matter when you take the funds from the IRA, except for managing taxes between years.
On the topic of taxes, you should consider looking at when/if you should do Roth Conversions or "unneeded" IRA withdrawals to avoid a tax torpedo at 70 when you combine RMDs with Pensions. Also, look at what happens to the survivor's tax situation if one of you, as is likely, dies before the other. That might also argue for earlier-than-necessary withdrawals (or conversions) to equalize the tax hit across the years.
__________________
OMY * 3 2ish Done 7.28.17
|
|
|
08-13-2016, 10:08 AM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
|
This tax calculator may be of use to you in deciding how to spread out your withdrawals.
https://turbotax.intuit.com/tax-tool...ml5/index.html
Agree with others that once you are both retired that you may want to consider low tax cost Roth conversions if you can do so.
__________________
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
|
|
|
08-13-2016, 02:53 PM
|
#10
|
Recycles dryer sheets
Join Date: Jan 2006
Posts: 371
|
You can take any contributions to a ROTH out at anytime without penalty.
We were considering 72-t but we don't need to we can just take ROth money out to get to 60 years old.
We can also do Roth conversions to hit the sweet spot for ACA.....
|
|
|
08-13-2016, 03:51 PM
|
#11
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
|
In OP's case no penalty on tIRA distributions either since they are >59 1/2 so taxes is the only issue.
__________________
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
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|