I need your feedback/comment on my withdrawal plan in retirement -
I will be turning 65 & retire next year & our income will be ONLY from my investments, apart from my Social Security at 70 & DW at Full retirement Age.
I am 64 & DW is 59, file taxes jointly & are in 24% Tax Bracket this year -
My Plan to draw down our assets in SEQUENCE for our living expenses is as follows -
1) Draw from Cash in the Banks for the FIRST 3 years & empty cash savings.
2) Draw initially from Tax Exempt Bonds in Taxable,
Then the Bonds in Tax Deferred IRA Accounts year 4 to year 18 -
(I am afraid my AA will be getting progressively aggressive as we age)
3) Draw from Stocks in the Taxable Accounts & then leave the remainder for inheritance - Allowing the stock funds time to taking Advantage of the STEP UP in basis for inheritance.
4)Leave Roth IRAs for inheritance.
5) Donate to Charity from our existing Donor Advised Fund (DFA) & later decide either from Tax deferred or Taxable depending on its effects on that years taxes.
1. I have noted other forum members withdraw either from Tax deferred/Taxable minimizing the taxes for that particular year. Although this makes sense to me I am unable to wrap my mind around this method.
2. Fidelity suggests to draw down proportionately from Taxable, Tax Deferred & Tax Free accounts simultaneously to keep the taxes approximately equal in all the retirement years.
I have 5 Vanguard Mutual Funds in total, which I manage with the help of members on this & Bogleheads Forums. We are lucky & fortunate to have sort of won the game,
Taxable Accounts -
VTSAX - Total Stock Market Index
VTIAX - Total International Stock Market Index
VWIUX - Tax Exempt Intermediate Term Bond Fund
Tax Deferred Accounts IRAs -
VBTLX - Total Bond Market Index
VTABX - Total International Bond Index
TAX free Roths -
VTSAX - Total Stock Market Index
Bank Accounts have Online Savings & CDs
Our present Overall Asset Allocation = 55/45,
Now that I have stated my above plan, I am not 100% sure which of the above 3 plans would come ahead.
I would appreciate any pointers & advise
I will be turning 65 & retire next year & our income will be ONLY from my investments, apart from my Social Security at 70 & DW at Full retirement Age.
I am 64 & DW is 59, file taxes jointly & are in 24% Tax Bracket this year -
My Plan to draw down our assets in SEQUENCE for our living expenses is as follows -
1) Draw from Cash in the Banks for the FIRST 3 years & empty cash savings.
2) Draw initially from Tax Exempt Bonds in Taxable,
Then the Bonds in Tax Deferred IRA Accounts year 4 to year 18 -
(I am afraid my AA will be getting progressively aggressive as we age)
3) Draw from Stocks in the Taxable Accounts & then leave the remainder for inheritance - Allowing the stock funds time to taking Advantage of the STEP UP in basis for inheritance.
4)Leave Roth IRAs for inheritance.
5) Donate to Charity from our existing Donor Advised Fund (DFA) & later decide either from Tax deferred or Taxable depending on its effects on that years taxes.
1. I have noted other forum members withdraw either from Tax deferred/Taxable minimizing the taxes for that particular year. Although this makes sense to me I am unable to wrap my mind around this method.
2. Fidelity suggests to draw down proportionately from Taxable, Tax Deferred & Tax Free accounts simultaneously to keep the taxes approximately equal in all the retirement years.
I have 5 Vanguard Mutual Funds in total, which I manage with the help of members on this & Bogleheads Forums. We are lucky & fortunate to have sort of won the game,
Taxable Accounts -
VTSAX - Total Stock Market Index
VTIAX - Total International Stock Market Index
VWIUX - Tax Exempt Intermediate Term Bond Fund
Tax Deferred Accounts IRAs -
VBTLX - Total Bond Market Index
VTABX - Total International Bond Index
TAX free Roths -
VTSAX - Total Stock Market Index
Bank Accounts have Online Savings & CDs
Our present Overall Asset Allocation = 55/45,
Now that I have stated my above plan, I am not 100% sure which of the above 3 plans would come ahead.
I would appreciate any pointers & advise
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