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Old 03-26-2018, 05:30 PM   #41
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Just curious.... do you think that the 22/28% tax rate that you expect to pay on RMDs is lower or higher than your marginal tax rates when you deferred that income?
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Old 03-26-2018, 07:22 PM   #42
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Originally Posted by Hermit View Post
Actually, you don't have to do anything with RMDs except pay tax and move the proceeds to a taxable account. With the cash you have you can pay the taxes out of that stash and just move the funds to taxable.
That is something I never would of even thought about. That is a great idea when the times that would be a great option.
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Old 03-26-2018, 08:19 PM   #43
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That is something I never would of even thought about. That is a great idea when the times that would be a great option.
Some brokerages even allow withdrawal in kind, so you donít have to sell the asset in the IRA and then rebuy in taxable. Of course your new taxable basis will be established when the asset is withdrawn, so it is equivalent to having bought it exactly then.
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Old 03-26-2018, 10:00 PM   #44
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Just curious.... do you think that the 22/28% tax rate that you expect to pay on RMDs is lower or higher than your marginal tax rates when you deferred that income?
About the same. Of course life does not always turn out how you expect or plan. A lot of my situation is caused by being single. The late DW was 10 1/2 years younger than me. I never even dreamed she would not out live me. In the current situation, I won't complain too much because between the pension without survivor benefits and SS on DW's account until I turn 70, I am doing pretty nicely financially.
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Old 03-26-2018, 11:50 PM   #45
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IMHO it is tempting to over-plan this kind of stuff. Like treating a SWR as if it is graven in stone and cannot be changed. There is also a common belief that our year-to-year spending will be level. Not so. To me, finances in retirement is a little like driving my car. As situations occur and as I see potholes or opportunities to coast, I deal with them. Like driving, I make small corrections as needed.

For cash, a small Megacorp pension ($800/month) plus Social Security almost but not quite handles my regular monthly expenses. A thousand$ or so a month plus cash for real estate taxes, income taxes, travel, etc. is the remaining need.

So when I need to top up the checking acount, I sell a few$K of equities or transfer a few $K when a t-bill matures. This happens maybe six times a year. The $K amount is a tiny blip on our AA, so I really don't worry about that.

As far as "cash" is concerned I never hold any significant amount. T-bills is about as close to cash as I get. Both DW and I have standby credit lines on our checking accounts so in the highly unlikely case where we immediately needed ten or twenty $K it is available to us that way rather than via an emergency sale of investment assets.

I would suggest that you ignore your question until you're retired. Then wing it for a year or so and the answer to your question, for your particular situation, will probably become clearer.


I think this is great advice based on my situation in retirement so far (17 months). Pre ER, I was a pretty detailed planner, but post-ER, Iíve been much more laid back. We just spend what we want to/need to in order to support our desired lifestyle. Due to some employee benefit payments from my previous employer, so far we have withdrawn very little from our taxable investment portfolio. That may change over time but I have been happy with the ďwinging itĒ approach so far.

Since the market has performed so well, net worth is up considerably since ER. I might not feel as laid back about all of this if the market were down.
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Old 03-27-2018, 06:07 AM   #46
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Some brokerages even allow withdrawal in kind, so you donít have to sell the asset in the IRA and then rebuy in taxable. Of course your new taxable basis will be established when the asset is withdrawn, so it is equivalent to having bought it exactly then.
audreyhi >>>>>> thank you for that info and I will ask them if they do that kind of transaction with RMD moneys.
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Old 03-27-2018, 06:45 AM   #47
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I keep about 3 months expenses in a local checking account (zero interest), and about 1 year of expenses in the Vang. Money Market account (right now that's about 1.5% interest). Every month I transfer from Vang. to my checking account about 1 month's worth.

Every 6 months I replenish the MM account, with a portion of my IRA Withdraw.
That's how we do it. We have about 2 years of dividends set aside in a short term bond fund and draw from that 2 or 3 times a year to replenish our checking as needed.

The dividends get replenished monthly/quarterly/annually.
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Old 03-27-2018, 01:59 PM   #48
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I have to manage cash in the form of dividends and maturing bonds. So every month I am able to top up our cash reserves. Our target is 12 months expenses. 6 months in pesos in Mexico and same in local currency. We are in a position of increasing our annual spend with transfers to kids/GCs and charities so that is a moving target but easily managed with our monthly process.
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