Poll:For those who take their annual withdrawals at the beginning of each year...

[mistermike40]

Do you still take your full withdrawal on a day when the market is down (like today)? Or do you wait until (hopefully) the market recovers a bit?

[W2R]

Normally I just withdraw the money from my Vanguard taxable accounts during the first week in January, without regard to short term market fluctuations. I take a long term point of view when it comes to annual withdrawals.

I must embarrassedly admit that I haven't had to make an annual withdrawal from my Vanguard accounts for the past three years, because of other income sources that meet my spending needs (SS, mini-pension, etc). But back when I was withdrawing, that was how I did it.

[harllee]

I keep enough in cash (money market) that I just withdraw from the cash as I need it. Don't have to worry about the market

[Time2]

I'm not sure I have it worked out best, but I take out next years expenses the previous year. Last year I took about $120,000 out of a taxable account that resulted in $28,000 of LTCGs. This added to my Dividends and interest, a $1,000 short term gains and a $75,000 Roth conversion kept me in the 12% bracket.
With the funds from last year, I funded an HSA, paid my daughters large tuition, and have about $50,000 left to fund my sons Roth IRA and enough for our 2021 expenses. The thing I should do, is find a place to earn a few percent on the $50,000 before it gets spent on living expenses.
Any thoughts?

[SecondCor521]

Quote:

Originally Posted by Time2 I'm not sure I have it worked out best, but I take out next years expenses the previous year. Last year I took about $120,000 out of a taxable account that resulted in $28,000 of LTCGs. This added to my Dividends and interest, a $1,000 short term gains and a $75,000 Roth conversion kept me in the 12% bracket. With the funds from last year, I funded an HSA, paid my daughters large tuition, and have about $50,000 left to fund my sons Roth IRA and enough for our 2021 expenses. The thing I should do, is find a place to earn a few percent on the $50,000 before it gets spent on living expenses. Any thoughts?

I just stick my extra in an online HYSA. I think I'm getting about 0.6% on mine now.

But I also don't take out a year at a time; I only do a few months at a time. That way I don't have as much extra lying around in the first place.

[Time2]

Quote:

Originally Posted by SecondCor521 I only do a few months at a time. That way I don't have as much extra lying around in the first place.

But, this is how I can plan my taxes.

I'm 65 and still have a pretty high percentage in mutual funds (72%), so a little cash on the side is not terrible.


Just ask, I can make up an excuse for what I do. :-)

[audreyh1]

Quote:

Originally Posted by mistermike40 Do you still take your full withdrawal on a day when the market is down (like today)? Or do you wait until (hopefully) the market recovers a bit?

Yes, otherwise you get caught playing frustrating mind games and you get stuck watching daily market fluctuations.

My withdrawal is based on the Dec 31 value.

I usually have enough cash built up from Dec cap gains distributions to cover it anyway.

If you use your withdrawal to rebalance, you just end up taking very slightly less from equities.

[RobLJ]

That's kind of what the cash is for. That said, to withdraw from the 403b, I have to submit a withdrawal form that needs the signature of the benefits coordinator, so I"m waiting for Fidelity to mail me the form (you can't download it like you can the IRA and other forms!). So my withdrawal probably will get processed and deposited the 3rd or 4th week of January.

[Dtail]

I withdraw based on the end of last year's balance. I usually withdraw the TIRA portion in January and then the monthly amount (Taxable/TIRA) gets transferred from Ally to BOA.

[Mark1]

Over the weekend, I updated my new monthly transfer amount for my Marcus Online Bank to my Fido Checking account for the next 12 months, based on my end of year portfolio amount (actually a 3 year weighted average number such that I don't over-react/under-react to one years performance). The actually money is transferred on the 21st each month right before my Fido Visa CC closes. Right now I don't have enough money in Marcus to cover the entire year yet, but I do know which money is earmarked at this point and I will transfer over money to Marcus as CDs come due, move IRA money out, etc. As others have stated, I only transfer money to Marcus from cash/CDs/Bonds so the daily ups and downs of the market doesn't really matter.

[tmm99]

I try to take an annual withdrawal in January, and I have been doing that the last several years although the market was not very happy some of the time.Having said that, if the market was really down (like DJIA dropping down to 18,000 like it did last year), I would wait. I have enough cash on hand to wait it out for a year or two if I have to.

[statsman]

Something to think about when we start taking RMDs for DW starting in three years, unless they extend the minimum age requirement out further.

That said, we do have a small inherited IRA we are required to take RMDs from. Since it probably wouldn't matter much when we take it, I usually wait until the end of the year and use the RMD to backfill withholding, if needed.

[SloHan]

I do monthly withdrawals from taxable accounts based on the Dec 31 value. This was tested early last year and I did stop withdrawals for three months. Being a SIRE provided some flexibility for me when the pension and other income cover the non discretionary spending.

[NW-Bound]

I cannot vote, because there's no 3rd option.

I do not make scheduled withdrawals. I withdraw money through the year as I need it, and when I do, I aim to have about 2 months of expenses in the checking account. Of course when I have unexpected expenses, I need to withdraw sooner than 2 months.

And I always have cash sitting around, so no need to sell anything when I take out the cash.

So, no concern about market performance when withdrawing, because the cash is always there.

[rk911]

Quote:

Originally Posted by mistermike40 Do you still take your full withdrawal on a day when the market is down (like today)? Or do you wait until (hopefully) the market recovers a bit?

well, the only annual RMD we currently have is my wife's inherited IRA. we currently take that every January 15th (+/- depending on the calendar). I gave up trying to time the market lonnnnnng time ago.

[foxfirev5]

With plenty of cash I simply w/d according to plan. I have a 40-45% equity allocation which never requires selling unless my rising equity glide path takes off too fast. I run a little looser than most and manage top down based on a guideline of total portfolio value.

[Dtail]

Quote:

Originally Posted by statsman Something to think about when we start taking RMDs for DW starting in three years, unless they extend the minimum age requirement out further. That said, we do have a small inherited IRA we are required to take RMDs from. Since it probably wouldn't matter much when we take it, I usually wait until the end of the year and use the RMD to backfill withholding, if needed.

Agree in waiting until EOY for withholding backfill.

[Badger]

Quote:

Originally Posted by harllee I keep enough in cash (money market) that I just withdraw from the cash as I need it. Don't have to worry about the market

The only withdraws we make are RMDs. The total amount is taken from the tIRA MM fund that is replenished by the dividends swept from the tIRA MFs. I don't see a time when we will need to cash in any shares of tIRA MFs. We still have the same number of MF shares that we retired with only they would cost more today. When we withdraw is not dependent of the stock market.
I don't pretend to know if this is a good method but it is a method that works for us.



Cheers!

[Sue J]

Quote:

Originally Posted by W2R Normally I just withdraw the money from my Vanguard taxable accounts during the first week in January, without regard to short term market fluctuations. I take a long term point of view when it comes to annual withdrawals. I must embarrassedly admit that I haven't had to make an annual withdrawal from my Vanguard accounts for the past three years, because of other income sources that meet my spending needs (SS, mini-pension, etc). But back when I was withdrawing, that was how I did it.

Don't be embarrassed! BE PROUD!

[ER2B]

I planned to sell equities in my taxable account today but held off. I will need a good chunk of money by mid month to pay some huge estimated Fed and state taxes from Roth conversions and IRA withdrawals. I will tap from taxable TIPS or MM funds or bonds from IRA if this sell off continues.