Withdraw retirement funds once/year or ???

[karluk]

But if you rebalance via withdrawals, you're selling the assets that have performed better, which is not addressed in the article.

I would also question the methodology used in the article. If you had been withdrawing during 2008 and rebalancing as part of the withdrawal, you would have been redeeming exclusively from the bond/fixed income portion of your portfolio. You would have been a net purchaser of stocks in 2008, even factoring in the withdrawals.

 

[In-control]

Usually in January I sell from my taxable accounts, trimming the allocation back to where I want it, to fund a 5 yr CD that equals my budget. I have 5 yrs of laddered CD's. Most would call that excessive but it helps me sleep at night and not worry so much about the market's current fluctuations.

 

[Chuckanut]

Dollar cost averaging during withdrawals is generally thought not to be a good idea. Dollar cost averaging - Bogleheads

I would think one can get around the disadvantages by redeeming a fixed number of shares every month or quarter. Of course, that means that one's income will vary and many of us don't want that outcome.

A bit off topic, here is another line from the above article:

One should also note that indexing the portfolios would add 0.70% to each portfolio's returns simply due to reduced costs.

 

[MBAustin]

We too are getting ready to draw next year. I see many of you take "the dividends" and or sell annually when it is time to rebalance. Why not take the capital gains also??

We take all dividends and capital gains from our taxable accounts in cash deposited into our money market account.

I have liquidated a couple of taxable accounts for large purchases and to simplify our overall finances - in both cases because they had generated significant capital gains over the years (taxes already paid on them) the tax bite was not too bad (not nearly as bad as calculating the cost basis since we had dollar cost averaged into them for several years back in the 1990s - THAT was a P.I.T.A.)

The past few years the distributions plus DH's SS and pension have covered our living expenses (excluding the above large purchases) so I have rebalanced within our IRAs.

 

[jebmke]

I would think that if regular contributions is the way to go with money on the way in, regular withdrawals is the way to go on the way out.

Have a maximum withdrawal rate per week/month/qtr, and never exceed it.

That is the way I am planning it.

I did the opposite. On contributions, I saved regularly but when I received windfalls I put all of them into investments. ER'd in 2008.

Now, I spend "normally" and withdraw whatever I need when I need it. But if something unexpected happens I don't worry about withdrawing more. Some might call me crazy but we actually spent more during the recession than a normal year. Prices and availability of home improvement contractors was very attractive in 2009 so it made sense to take advantage. Likewise, deals on travel were phenomenal so we went to Italy in the fall of 2009. Must admit, had to sell a lot of bonds in 2009 to fund the year AND re-balance to equity.

I don't use a mathematical system to withdraw - just judgement.

 

[old woman]

I am doing whatever I want so far. I sold some investments to buy a boat and took some extra to leave sit in checking, then got inheritance and left some in checking. It has only been 8 months so far but I am not spending very much. My SS covers my mortgage so I just need some for utilities and spending mostly. Leaving 10K or so in checking will last me until I run out then I will put more in or spend from my HELOC then sell something to pay it back. When I get to 70 I will do the RMD once a year and invest what I don't need, but my SS will go up so high I won't need it. I am collecting on my late husband until I get to 70 so it will triple. I saved too much money so I a randomly spending mostly on gifts and remodeling.

 

[foxfirev5]

I am doing whatever I want so far. I sold some investments to buy a boat and took some extra to leave sit in checking, then got inheritance and left some in checking. It has only been 8 months so far but I am not spending very much. My SS covers my mortgage so I just need some for utilities and spending mostly. Leaving 10K or so in checking will last me until I run out then I will put more in or spend from my HELOC then sell something to pay it back. When I get to 70 I will do the RMD once a year and invest what I don't need, but my SS will go up so high I won't need it. I am collecting on my late husband until I get to 70 so it will triple. I saved too much money so I a randomly spending mostly on gifts and remodeling.

Now that's a plan!

 

[GregfromTexas]

I think it depends on your investments and if you are making trades every time you "withdraw".

To use an extreme (and unlikely) example, if you have your own handpicked selection of 50 stocks and "withdraw" means selling a portion of each then even at a discount brokerage that's $350 in transaction fees per month. That might start to be a factor.