Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-17-2009, 04:27 PM   #21
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
My pension arrives once a month; my CDs mature in December.
__________________

__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan 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 06-17-2009, 04:51 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,456
Quote:
Originally Posted by WilliamG View Post
Good point on re-balancing vs withdrawal. I was speaking only to withdrawal mechanics. Portfolio asset allocation and re-balancing is done separately. We have a bucket of "safe" investments in IRA as mentioned above from which we can easily keep IRA MM above withdrawal amount (the MM is what is automatically transferring to taxable). Since we route all dividends in the IRA to IRA MM, quarterly distributions come close to being what we need for our quarterly transfers.
It ultimately doesn't really matter whether that MM fund holding a year's worth of expenses (including anticipation of taxes due) is inside the IRA or outside of the IRA. The point is to get what you need out of investments that change value during the year (i.e. keep it in cash). The OP spoke of "monthly is best to dollar cost average out" which implies she was considering selling equities/bonds on a monthly basis. I was pointing out why you might not want to do it that way.

Audrey
__________________

__________________
audreyh1 is offline   Reply With Quote
Old 06-17-2009, 08:45 PM   #23
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
Quote:
I am assuming monthly is best to dollar cost average out,
The same math that makes dollar cost averaging work in your favor when accumulating savings, works to your disadvantage if you try to dollar cost average out of equities. If you want a monthly cash flow, you probably want to pull living expenses out of cash or near-cash holdings and rebalance periodically.
__________________
growing_older is offline   Reply With Quote
Old 06-17-2009, 10:47 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by TromboneAl View Post


IOW, there's no explicit withdrawal of money.

That's how it works at our house too. I have a seven year spending history (by month) posted on the bulletin board over my desk. I modify that with pencilled info concerning ad hoc plans such as a special purchase or vacations. Normal (for me) money movements inside our investment portfolio are tapped to get the needed cash into DW's checkbook in adequate amounts to cover expenses. Other than DW's checking account, there are no separate "buckets" or other accounts and no formal withdrawal schedule. Our source of spending money is different every year depending on market conditions, maturities of fixed investments, reinvestment opportunities, etc.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 06-20-2009, 12:21 PM   #25
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,240
Retired for less than 4 years now and we have been using non-IRA money to supplement pension (and now DW's SS). YEARLY, one-time IRA withdrawals have been for conversion to Roths - until last month. This year's withdrawal (not an RMD, mind you) has gone for part of down payment for new property.

We have been paying quarterly taxes (Fed/State) to cover the IRA conversions and will continue to do so - only this year there will be no conversions IRA custodians have never required withholding. Hope we didn't screw up. We always send extra for quarterly taxes to be sure we don't pi** off Uncle.

Next year, we will have to begin taking funds from IRAs for actual living expenses. Based on that, we need to answer the same question as OP. Monthly or yearly? I'll let you know!
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Old 06-20-2009, 01:13 PM   #26
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Quote:
Originally Posted by Koolau View Post
Next year, we will have to begin taking funds from IRAs for actual living expenses. Based on that, we need to answer the same question as OP. Monthly or yearly? I'll let you know!
One point I've not seen made (forgive me if I missed it) is the ability to fine-tune your tax liability if you withdraw monthly. This could be important, especially if you are on the edge of a higher tax bracket.

If you withdraw a full year of expected expenses and for some unforeseen reason have additional income in that year, you could end up paying an unnecessarily higher tax on the incremental income. Withdrawing from your IRA monthly will allow you to adjust your income if needed and better control your tax liability.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 06-20-2009, 01:18 PM   #27
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by REWahoo View Post
One point I've not seen made (forgive me if I missed it) is the ability to fine-tune your tax liability if you withdraw monthly. This could be important, especially if you are on the edge of a higher tax bracket.

If you withdraw a full year of expected expenses and for some unforeseen reason have additional income in that year, you could end up paying an unnecessarily higher tax on the incremental income. Withdrawing from your IRA monthly will allow you to adjust your income if needed and better control your tax liability.
Great point.

You may think you're only going to have an income of (say) $50,000 in a year (still in the 15% bracket for joint filers), but what if you later take (gasp) a part-time j*b or get some unexpected windfall that kicks you into the 25% bracket? By taking it out when only you need it, you might be able to withdraw less from the tax-deferred accounts when you come across "more money" and stay in the lower tax bracket.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 06-21-2009, 06:28 PM   #28
Moderator Emeritus
CuppaJoe's Avatar
 
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,866
I plan to take a good look at taxes in Oct. to see if I should take some 2009 or 2010 expenses out of the tax-deferred part of the PF before the end of the year. Roth conversion is another issue to look into. So far, I've been withdrawing only from the already taxed part of the PF but want to leave a lot in that section to continue to play it off the tax-deferred part.
__________________
CuppaJoe is offline   Reply With Quote
Old 06-21-2009, 07:08 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
It's pretty easy for us now and for the next 4 1/2 years. The pension check will be coming in once a month and we'll transfer money from our money mkt account to our checking account about every 2 months or so. This money is in taxable accounts.

It will be a whole 'nuther ball of wax when we start taking money from IRAs.
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 06-23-2009, 06:08 AM   #30
Dryer sheet aficionado
 
Join Date: Mar 2005
Location: Alexandria
Posts: 47
Quote:
Originally Posted by Want2retire View Post
As for my TSP, I will be getting equal monthly payments sent to me. It seems to me that they withhold taxes, but if they don't then I will just withhold it myself - - I'll have to manually put the projected taxes on the TSP money into my savings account and the spending portion in checking. Basically, anything in checking is fair game for spending.

As I understand it, my federal pension and social security don't withhold state taxes so I'll have to manually withhold them in a similar way. What a headache. It sounds like we really have to work at being retired! I will be paying estimated taxes quarterly.
The feds will withhold for state taxes. I use a monthly TSP transfer to my credit union, with no taxes withheld, to maximize my taxable income up to the top of the 15% federal bracket. Being lazy and forgetful, I use the federal retirement system to withhold enough for both federal and state taxes, a method that can be adjusted monthly on-line, as necessary.
__________________

__________________
Chester_A._Riley 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
LIFO withdrawls - always best ? 401K and IRA too ? Delawaredave FIRE and Money 3 01-28-2007 11:28 PM
Monthly expenses eyetri2 FIRE and Money 27 04-16-2006 09:35 AM
401K withdrawls - taxes getoutearly FIRE and Money 21 02-13-2006 08:20 AM
What are your monthly expenses? accountingsucks FIRE and Money 13 02-02-2006 11:08 AM
Help Re Options for Retirement Monthly Payouts Ginger Other topics 14 08-05-2005 01:41 PM

 

 
All times are GMT -6. The time now is 02:46 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.