Funding your cash flow

[WilliamG]

I will be 59 1/2 and will begin taking from a roll-over IRA in September. We have planned to fund annual expenses and withdraw from our portfolio in a manner similar to that espoused by Frank Armstrong as well as others; i.e., 1) Determine the next year's cash flow, 2) move the required amount to a money market fund basing where to move the money from on your overall asset allocation plan (except don't sell stocks in a down market) and 3) make other asset re-allocations as might be appropriate after funding your money market.

We started out with a small variation on this approach of routing all of our dividends within the IRA to the money market so that the amount needed to move on an annual basis would be somewhat less than otherwise. Have heard from several quarters that this is not good "total return" investing and in fact prejudges from which assets you will get some of your
total return funding.

Questions: Does anyone see a big difference in these approaches or significant pros / cons of each? Other strategies for funding cash flow in retirement? If there is already a conversation on this subject please refer me as I didn't see it.

Many thanks, Bill

 

[wabmester]

There's a thread around here somewhere that discusses withdrawal strategies, but a lot of people seem to like the ORP calculator:

http://www.i-orp.com/

I don't see any advantage to routing IRA dividends to a money market account. You simply miss out on a year's worth of reinvested dividends.

However, it does make sense to route taxable interest to a money market account, and to a lesser extent, taxable dividends as well.