What's your 401K Withdrawal Routine or Strategy - Monthly, Yearly, or Whenever?

[meleana]

My 401k money wasn’t that much so I rolled it over into an IRA. My husband has a Stable Value fund with a sizable amount of $ in his, but we haven’t tapped it or our IRA’s.

Retired in 2019 and living on cash to keep income low until we take SS. Probably will do small Roth conversions starting this year.

We keep almost a year’s living expenses in our no interest checking account right now.

We are 67 and 65.

 

[RE2Boys]

Once a year, in early December, I withdraw my RMD, have 100% of the withdrawal sent to the IRS to cover estimated income tax. Done with 401k for another year.

 

[2017ish]

Starting last year, I began a monthly automatic withdrawal from one of our TIRA accounts, with 20% tax withholding (over 59.5, 8 years before social anticipated). Those withdrawals total up to about 75% of our "allowed" spending this year. Purpose is to establish "income history" if we decide to buy a new place and require a loan; plus, it makes things easy.

To fund it, we sell 6 months worth of either bond or equity funds (depending upon present allocations), then keep the cash in the IRA; lather, rinse, repeat every six months.

If we need more money, I suppose we'll just sell something and withdraw as needed.

 

[Morgan22]

We're withdrawing monthly from DH 457b account. Once that runs out, maybe end of 2023?, we'll start a 72t on my IRA. We might just do a yearly w/d on that account, haven't decided yet.

 

[LakeRat1]

We do a monthly draw from our rolled over 401ks, from this we have Federal taxes paid, auto magically, the rest goes into our checking account ..... It has worked great for us the past 8 years .....

 

[Live Large]

Monthly@55

OP ~ thanks for ?

As I debated about w/d from all those years of saving specific to retirement I didn’t touch it post retirement as pension covered down. My 457 similar to 401k has good investment options and includes the ability to transfer funds to TD America brokerage now owned by CS. I keep a six figure amt in the stable funds where I began w/d $3000mo. at age 55 last summer. I was fortunate to retire at 51 so the market kept churning nice returns 70/20/10. Taxes were not bad 22%. DW has remained employed 2yr.
National average I understood is 14%. As moniker implies not afraid to blow a little dough. ER has been great for solid varying $ suggestions that work. Hope it works out for you!

 

[misanman]

We pay ourselves a monthly "salary" out of our IRA. The cash to pay the salary comes from dividends.

 

[TheWizard]

We pay ourselves a monthly "salary" out of our IRA. The cash to pay the salary comes from dividends.

But, unfortunately, they get taxed as Ordinary Income...

 

[TheWizard]

I did monthly withdrawals from my tax-deferred 403(b) from the very start of retirement.
I then changed half of that withdrawal to a monthly Roth conversion, since I didn't need the money for immediate expenses. My withdrawal strategy was more about managing my AGI for tax purposes than getting money to spend that month.

I have started RMDs this year and continue to do monthly withdrawals, but no more Roth conversions...

 

[misanman]

But, unfortunately, they get taxed as Ordinary Income...

Probably should have been a bit more explicit about "dividends". I vary my asset allocation based on the type of account so most of my qualified dividend paying securities are in a standard investment account. The "dividends" from the IRA are mostly from target date bond funds, REITs, and preferred. What little option trading I do is in the Roth IRA.

 

[CRLLS]

We do a rough figure as to what we need for the year and set up automatic monthly withdrawals for that year. The next year, we do the same. If it looks like we will have excess in any year, we stop the auto withdrawals. We figure if dollar cost averaging works during the growing years, then it should also follow for the later years. We like the monthly income aspect of it as our bills mostly are monthly also.

We have not gotten to the RMD years quite yet. We also do the Roth conversions up to, but not into the IRMMA surcharge. I never thought of it before but the ~$25K over IRMMA up to the top of the 22% bracket is essentially taxed at ~30% when considering the IRMMA penalty.