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View Poll Results: Retirees: how are you funding your retirement?
Withdrawing entirely from taxable first 15 36.59%
Withdrawing mostly from taxable first 4 9.76%
Withdrawing entirely from tax-deferred first 0 0%
Withdrawing mostly from tax-deferred first 4 9.76%
Withdrawing entirely from tax-free (Roth) first 0 0%
Withdrawing mostly from tax-free (Roth) first 0 0%
Some combination (please explain) 4 9.76%
Just living off pension/Social Security for now 10 24.39%
Living off my spouse's income for now, thanks 4 9.76%
Voters: 41. You may not vote on this poll

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Withdrawing from which account (retirees only)
Old 11-02-2006, 08:29 AM   #1
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Withdrawing from which account (retirees only)

ats5g's post about withdrawal tax strategy inspired me to create this poll.
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 08:34 AM   #2
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Re: Withdrawing from which account (retirees only)

I voted "some combination". SS plus trad. IRA for now. That's it.

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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 08:38 AM   #3
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Re: Withdrawing from which account (retirees only)

I'm in the 'some combination of both' category. I'm about 50-50, including converting a slug of traditional IRA money to a Roth while finessing to stay in the 15% tax bracket. That's the plan for the next couple of years.

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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 08:57 AM   #4
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Re: Withdrawing from which account (retirees only)

http://www.fpanet.org/journal/articl...p1106-art8.cfm

is a brand-new article entitled
Optimal Withdrawal Strategies for Retirees with Multiple Savings Accounts by Stephan M. Horan.

I haven't read it yet (I am not a retiree), so I leave it up to you folks to read it and see if it is helpful. Also note that some of the references at the end of the article should be read as well.

Let there be discussion!
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 09:17 AM   #5
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Re: Withdrawing from which account (retirees only)

Living off the rents , which are "entirely taxable".
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 09:38 AM   #6
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Re: Withdrawing from which account (retirees only)

Living solely off bond interest and dividends. No withdraws unless you want to count the fact that I am not reinvesting the dividends?
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 09:49 AM   #7
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Re: Withdrawing from which account (retirees only)

Zathras, is that bond interest and dividends in taxable accounts? (You could be taking them from tax-deferred or tax-free accounts, after all.) I think of interest and dividends that one has automatically dumped into one's checking account as withdrawals--you could've left them in their accounts after all (whether taxable or not).
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 09:54 AM   #8
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Re: Withdrawing from which account (retirees only)

All goes in the same pot so the options are:

1. All SS and some Pension but no savings.

2. Mostly Pension and no SS or savings.

3. Mostly Savings, no Pension and no SS.

I think #1 is the current sources of Retirement living funds for 2006 and 2007.
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 10:07 AM   #9
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Re: Withdrawing from which account (retirees only)

We're killing off a mutual fund in a taxable account with huge unrealized cap gains (shares held for over 10 years) and a 1.38% expense ratio.
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 10:08 AM   #10
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Re: Withdrawing from which account (retirees only)

"Voted" some combination. Have a five year projection for expenses and "income management" which allows us to manage taxable income toward but not above the 15% federal marginal tax rate. See the advantage of holding off paying taxes, but on the other hand don't believe tax law will get any better down the road. Spouse still works part time, so we wind up being able to fund Roths with some of this income.
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 10:34 AM   #11
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Re: Withdrawing from which account (retirees only)

Well, the dividend stocks are tax deferred, the bonds are not, so I picked 'some combination'.
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 11:17 AM   #12
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Re: Withdrawing from which account (retirees only)

I'm not ERed yet, but one thing I initially plan to do is to live off after tax money and either take an amount
equal to my exemptions and deductions taken from my 457 plan or convert that same amount to from my
IRA to a ROTH
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Re: Withdrawing from which account (retirees only)
Old 11-02-2006, 01:12 PM   #13
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Re: Withdrawing from which account (retirees only)

Small but adequate pension.
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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 09:02 AM   #14
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Re: Withdrawing from which account (retirees only)

I'm living entirely off taxable investments and have been since 1999. I can't pull from IRAs until 59 1/2. I can't draw SS until 62 or later. No pension.

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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 09:10 AM   #15
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Re: Withdrawing from which account (retirees only)

Quote:
Originally Posted by audreyh1
I'm living entirely off taxable investments and have been since 1999. I can't pull from IRAs until 59 1/2. I can't draw SS until 62 or later. No pension.

Audrey
So I imagine you have no earned income. If that's the case are you doing IRA to ROTH conversions? to use up your income tax deductions and allowances.
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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 09:29 AM   #16
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Re: Withdrawing from which account (retirees only)

Have been harvesting capital gains at 15% rate. No state income tax...
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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 01:08 PM   #17
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Re: Withdrawing from which account (retirees only)

Quote:
Originally Posted by audreyh1
I can't pull from IRAs until 59 1/2.
What about SEPP? http://www.retireearlyhomepage.com/wdraw59.html
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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 01:27 PM   #18
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Re: Withdrawing from which account (retirees only)

I voted Taxable first which, when it becomes necessary, I intend to do. In the meantime it is SS and part of Pension.
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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 01:34 PM   #19
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Re: Withdrawing from which account (retirees only)

nun -- If one is in the 15% tax bracket and will remain therin in the future can you still make a case for converting before tax traditional IRA to a ROTH? I have a ROTH and a Traditional IRA but after running the numbers, and assuming the tax system remains static, I cannot make a case for further conversions.
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Re: Withdrawing from which account (retirees only)
Old 11-03-2006, 03:52 PM   #20
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Re: Withdrawing from which account (retirees only)

Quote:
Originally Posted by Old Army Guy
nun -- If one is in the 15% tax bracket and will remain therin in the future can you still make a case for converting before tax traditional IRA to a ROTH? I have a ROTH and a Traditional IRA but after running the numbers, and assuming the tax system remains static, I cannot make a case for further conversions.
I believe that Roth assets are potentially more valuable in that they do not cause your SS benefits to be taxed at higher levels the way that conventional IRA's do. See old threads on the Scott Burns "Tax Torpedo" effect...

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