Author Topic: When do you make your withdrawals?  (Read 2887 times)

DeskJockey2028

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When do you make your withdrawals?
« on: September 01, 2017, 08:48:11 AM »
Hey FIRE'd folks,

When do you make your 'stache withdrawals? Yearly, quarterly, monthly, weekly? As needed? Just curious.

Frankies Girl

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Re: When do you make your withdrawals?
« Reply #1 on: September 01, 2017, 09:04:30 AM »
All the suggested methods for withdrawals are likely. It's what works for the individual, and their unique account setups.

I have an inherited IRA, so that means I have to take a minimum distribution each year. Set it up to do so each May, which is completely arbitrary time. It could have been any month of the year, but May works for me.

I also have a sizeable (like half my portfolio) taxable account that throws off cap gains and dividends in April (small amount) and December (big ass amount). Since I'm having to count those cap gains and dividends in my income anyway, I stopped reinvesting my taxable and take the gains/dividends as cash and throw it into my savings account to cover expenses.

So I have money coming in April/May and December. That right there is pretty much how I take my withdrawals, and if I feel the need for more cash for some reason, I'd sell off out of my inherited IRA and pull from there, since keeping this account lower or trying to make sure it depletes first is the end game as far as minimizing the taxable income and avoiding taxes in general. It's pretty big tho, and honestly I've been drawing out of it for over 5 years now and it's grown instead of shrunk despite taking even more than the minimums most years.

Because I have a sizeable amount of my portfolio in my own personal IRAs that will eventually require me to take distribution when I hit 70.5, the inherited IRA and the taxable are the ones I'm focusing on now for expenses, and my own IRAs are my "old lady" money.

I frequently have no idea what I'm talking about. Like now.

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soccerluvof4

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Re: When do you make your withdrawals?
« Reply #2 on: September 01, 2017, 12:45:03 PM »
Depends.  If market is on an upward trend I take it out on new highs and try to take profits only.  If market is idling along then once a month. If market is dipping I add back in. I keep cash on hand to buy dips. This year I have taken out 50% more than usual but now I have done my max that I want to if it runs it runs if it dips I have sustainable cash to buy and live for what I feel is a good long dip.
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Gus_Smedstad

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Re: When do you make your withdrawals?
« Reply #3 on: September 01, 2017, 03:16:11 PM »
I don't make scheduled withdrawals.

Rather, I have a cash reserve of about 1 year's expenses, plus a substantial (~55% of the total) taxable brokerage account. Because until I recently, I mostly invested in individual stocks, I ended up with periodic infusions of cash whenever I sold a stock which had become overpriced, or suffered financial setbacks. Each time, if I had used some of the cash reserve, I used some of the proceeds to replenish the reserve rather than reinvesting all of it.

For example, if I had $20k in cash and I wanted $40k reserves, and I sold a position worth $100k, I'd put $20k of the proceeds into the cash reserve and reinvest the other $80k.

So far I haven't touched our IRAs. If things continue as they have, I won't before I hit 70.5.

Romag

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Re: When do you make your withdrawals?
« Reply #4 on: September 01, 2017, 06:41:51 PM »
I do a monthly withdrawal. My rate is quite a bit under 4% so I feel confident doing it that way. I'm prepared to modify my system if the numbers change.

Exflyboy

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Re: When do you make your withdrawals?
« Reply #5 on: September 03, 2017, 07:27:32 PM »
All the suggested methods for withdrawals are likely. It's what works for the individual, and their unique account setups.



I also have a sizeable (like half my portfolio) taxable account that throws off cap gains and dividends in April (small amount) and December (big ass amount). Since I'm having to count those cap gains and dividends in my income anyway, I stopped reinvesting my taxable and take the gains/dividends as cash and throw it into my savings account to cover expenses.



I am thinking of doing this too.. Our rent and taxable gains are pretty close to our annual expenses so this makes sense to me..

CanuckExpat

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Re: When do you make your withdrawals?
« Reply #6 on: September 10, 2017, 10:47:18 PM »
We have relatively large cash buffer, and a taxable account that throws off non-negligible dividends and capital gains mainly quarterly. Between those two and unexpected side/fun money we haven't had to make "withdrawals" yet (acknowledging that the dividends and capital gains are counted as withdrawals)
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RedmondStash

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Re: When do you make your withdrawals?
« Reply #7 on: September 16, 2017, 05:37:53 PM »
I've been curious about this, whether people make annual, semi-annual, quarterly, or monthly withdrawals.

I wondered whether people used a sort of reverse dollar-cost averaging by pulling money out of investments each month, to average out stock market bounciness over time. Sounds like nobody's really thinking about it that way.

For us, I expect we'll keep a cash buffer and keep an eye on the market, selling at opportune moments to get the cash we need, as much as possible. Probably quarterly. (We're not FIRE yet.)

Goldielocks

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Re: When do you make your withdrawals?
« Reply #8 on: September 16, 2017, 11:21:48 PM »
I only FIRED in March.  I have been using a cash savings account that I accumulated in advance, and my plan is to revisit a budget and frugal lifestyle to make it last as long as possible before triggering a withdrawal.   I want it to grow, if I can not touch it for many years, there is a greater chance of that.

That said, one of the strategies was related to over funding the kids' RESPs to get more grants...  so we start pulling back our excess contributions next year, and that may trigger a net add to savings instead of to investments.  We'll see.