Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
withdrawal percentages from assets
Old 01-02-2016, 02:42 PM   #1
Full time employment: Posting here.
 
Join Date: Mar 2010
Location: Chicago
Posts: 951
withdrawal percentages from assets

How do others here withdraw their money for retirement. I am not talking about total percent a year or various time tables like monthly or quarterly. But like, for example, what amount of stock or bonds. Say if you were 50/50 you would take 50% from stocks and 50% from bonds. Or maybe some take from their winners to get back in balance. I don't know if this is a dumb question but I am just curious to see others approach.
__________________

ripper1 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 01-02-2016, 02:49 PM   #2
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,790
In general, if you take from your assets in a way to maintain your asset allocation you will end up taking more from the winners and less (possibly nothing) from the losers. So, if your desired allocation was 50/50 and you were actually at 50/50 you would take half of your distribution from equities and half from bonds. On the other hand, if you were 40 equities and 60 bonds, you would take from bonds until you got back to 50/50.
__________________

Katsmeow is offline   Reply With Quote
Old 01-02-2016, 03:23 PM   #3
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 9,698
I agree that you want to do it in a way that maintains your asset allocation.

What some of us do (I learned this from reading here at er.org) is to let the dividends and CG distributions accumulate - and use that as a starting point for withdrawals... then xrebalance the remainder at whatever frequency you are comfortable. Several folks here rebalance 1x year... other rebalance if it gets out of balance by x%.... that's a choice you'll have to figure out... no right answer or wrong answer.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline   Reply With Quote
Old 01-02-2016, 05:56 PM   #4
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: 19,428
I usually have enough cash built up from distributions paid thoughout the prior year (most in Dec) to cover my withdrawal, then I rebalance what is remaining.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 01-02-2016, 06:00 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 9,235
Yep, distributions come at opportune times of the year. Yes, December distributions are higher than the rest of the months, but I need them to pay property taxes and college tuition due in January.

If I have to sell something to raise cash, it is mostly based on what has the least tax hit.

Rebalancing seems to be the least of my worries as things somehow almost reblance themselves. After all, if I'm getting less than 0.3% a month of distributions that is not going to throw off any asset allocation numbers to make them outside of my rebalancing bands.
LOL! is offline   Reply With Quote
Old 01-02-2016, 06:04 PM   #6
Moderator Emeritus
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 10,208
I've been retired almost 2 years surviving on cash from my portfolio. Next up - I'll take monthly disbursements from an annuity.


Sent from my iPad using Early Retirement Forum
__________________
The wilderness is calling and I must go.
Ronstar is offline   Reply With Quote
Old 01-02-2016, 06:15 PM   #7
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 40,855
Quote:
Originally Posted by audreyh1 View Post
I usually have enough cash built up from distributions paid thoughout the prior year (most in Dec) to cover my withdrawal, then I rebalance what is remaining.
+1
__________________
100% retired since 2009 and never plan to work for anybody ever again, paid or not. Retirement funded by Social Security, mini-pension, and investments (AA 45:55, mostly Vanguard). Debt free with no mortgage and over-the-moon happy to be retired.
W2R is offline   Reply With Quote
Old 01-02-2016, 06:33 PM   #8
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,811
Quote:
Originally Posted by W2R View Post
+1
+2
__________________
A totally unblemished life is only for saints.
frayne is offline   Reply With Quote
Old 01-02-2016, 10:24 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,886
I have all equities, no bonds, so not much help there. However, for my mom the policy is to withdraw only from bonds if the market is 20% or more down. Anything above that and the withdrawal is used to aid rebalancing of the AA as needed.
Animorph is offline   Reply With Quote
Old 01-02-2016, 11:50 PM   #10
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,821
Check out this thread too if you aren't already
Rebalancing and Withdrawal Strategies
walkinwood is offline   Reply With Quote
Old 01-03-2016, 06:23 AM   #11
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: 8,934
Quote:
Originally Posted by walkinwood View Post
Check out this thread too if you aren't already
Rebalancing and Withdrawal Strategies
There are lots of threads to consider if you search. This is another recent thread that touts equal withdrawals and PE/10 based selection.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 01-03-2016, 10:45 AM   #12
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 1,890
There are at least 47 gazillion methods (am I exaggerating?) for taking a withdrawal. I subscribe to the KISS method. Figure out how much cash you need. Subtract that from the total portfolio, reallocate the portfolio, transfer the cash to your bank.
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 01-03-2016, 12:04 PM   #13
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: 8,934
Quote:
Originally Posted by Gotadimple View Post
There are at least 47 gazillion methods (am I exaggerating?) for taking a withdrawal. I subscribe to the KISS method. Figure out how much cash you need. Subtract that from the total portfolio, reallocate the portfolio, transfer the cash to your bank.
But you haven't actually explained your method. To subtract an amount from your portfolio you have to sell something - equities, bonds, MF. The question is what do you sell when. If, for example, you mean that you simply subtract a proportional amount from each component then that is the method.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 01-03-2016, 12:08 PM   #14
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 3,809
I sold my winners this year. I want to be in Roth so I don't pay so much tax.


Sent from my iPad using Early Retirement Forum
Fedup is offline   Reply With Quote
Old 01-03-2016, 02:16 PM   #15
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 1,890
Quote:
Originally Posted by donheff View Post
But you haven't actually explained your method. To subtract an amount from your portfolio you have to sell something - equities, bonds, MF. The question is what do you sell when. If, for example, you mean that you simply subtract a proportional amount from each component then that is the method.
Don,
Easy-peasy!

Take the total portfolio, subtract the cash you need for the coming year.
Check the asset allocation, make changes (buy/sell) within your holdings leaving you with a balance in cash. Consider winners and losers, and make a decision at this time if you are making adjustments to holdings.
Extract the cash - transfer to your bank.

So I rebalance and withdraw cash. Hope that's clear!
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 01-25-2016, 10:30 AM   #16
Recycles dryer sheets
Trooper's Avatar
 
Join Date: Dec 2012
Location: Chandler, AZ
Posts: 263
Quote:
Originally Posted by audreyh1 View Post
I usually have enough cash built up from distributions paid thoughout the prior year (most in Dec) to cover my withdrawal, then I rebalance what is remaining.
Hi audreyh1 - Are you saying that you can live on only dividends and CG distributions throughout the year? Just using simple math and a 2% dividend rate you must either have low expenses or a pretty large portfolio.

Am I missing something?
Trooper is offline   Reply With Quote
Old 01-25-2016, 11:16 AM   #17
Full time employment: Posting here.
 
Join Date: Apr 2015
Posts: 903
Quote:
Originally Posted by Trooper View Post
Hi audreyh1 - Are you saying that you can live on only dividends and CG distributions throughout the year? Just using simple math and a 2% dividend rate you must either have low expenses or a pretty large portfolio.

Am I missing something?
Just checked out dividends and capital gains distributions for Vanguard LifeStrategy Moderate Grown VSMGX 60/40.

For example, you have 42,000 shares (~$1M).

06/24 Div $0.241 * 42,000 = 10,122
12/28 Div $0.264 * 42,000 = 11,088
12/28 LTCG $0.374 * 42,000 = 15,078
12/28 STCG $0.018 * 42,000 = 756
2015 TOTAL: $37,674

Definitely seems feasible particularly if you have other income coming in.
hnzw_rui is offline   Reply With Quote
Old 01-25-2016, 11:20 AM   #18
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 4,747
Quote:
Originally Posted by Trooper View Post
Hi audreyh1 - Are you saying that you can live on only dividends and CG distributions throughout the year? Just using simple math and a 2% dividend rate you must either have low expenses or a pretty large portfolio.

Am I missing something?
I think you'll find that many people here use the same approach.

I do.

Dividends/CGs + SS and perhaps a pension or rental income might cover the needs of 80% of the folks here.

A large portfolio doesn't help if your expenses aren't lower than income, so while all relative, I'd say low expenses are the rule.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 01-25-2016, 11:53 AM   #19
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: 19,294
Quote:
Originally Posted by ripper1 View Post
How do others here withdraw their money for retirement. I am not talking about total percent a year or various time tables like monthly or quarterly. But like, for example, what amount of stock or bonds. Say if you were 50/50 you would take 50% from stocks and 50% from bonds. Or maybe some take from their winners to get back in balance. I don't know if this is a dumb question but I am just curious to see others approach.
When I did the rebalancing after I retired, I shifted from 60/40/0 to 60/34/6. The 6% in cash is in an online savings account that earns 0.95%. I have an automatic transfer monthly from that online saving account which I consider to be part of our retirement investments to our local credit union account that I pay our bills out of. In a normal year our monthly transfers will use up a bit less than have of the online savings account and I refill it to 6% when I rebalance in December each year.

So in a nutshell... part of our AA includes cash and our withdrawals come from the cash.
__________________

__________________
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...60/35/5 AA
pb4uski is online now   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
Need some advice. What percentages of your stocks are U.S and international? dooo42 FIRE and Money 9 12-30-2010 03:51 PM
Asset Alloc - Why not use empirically derived percentages?? ScaredtoQuit FIRE and Money 29 06-01-2007 08:35 PM
Asset Allocation Percentages km4hr FIRE and Money 24 12-11-2005 01:15 PM
phantom assets and 4% withdrawal rate SteveLS Hi, I am... 12 08-07-2005 06:19 PM
Assets to include in Safe Withdrawal studies RedOscar FIRE and Money 12 07-10-2002 01:29 AM

» Quick Links

 
All times are GMT -6. The time now is 01:42 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.