Author Topic: Mechanics of selling particular shares; withdrawal mechanics??  (Read 1169 times)

Trudie

  • Handlebar Stache
  • *****
  • Posts: 1838
I don't have much experience selling investments (we've been in the accumulation phase and don't really move stuff around much).  I understand "cost basis" and how certain types of funds are characterized (contributions, earnings, conversions -- in the case of Roths). I'm an accountant so I've got a pretty good handle on the tax effects of different transactions.   Most of our unqualified stuff is with Vanguard.  Most of our retirement stuff is in 403bs, IRAs and Roth IRAs with TIAA (due to my husband's employment in higher ed.)

Because we will be mindful in our first years of ER of managing our income to qualify for ACA premium credits I want to be particular about the "character" of the funds with withdraw -- taking Roth contributions first and also minimizing gains on the unqualified stuff we cash out.  I'm clueless about the mechanics, though, and how to instruct the investment companies that we want to sell specific shares.

Can someone please advise on selling strategies?  Thanks.

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Mechanics of selling particular shares; withdrawal mechanics??
« Reply #1 on: April 28, 2016, 01:03:30 PM »
I'm clueless about the mechanics, though, and how to instruct the investment companies that we want to sell specific shares.

Can someone please advise on selling strategies?  Thanks.

If you're selling from your Roth, your contributions that are withdrawn before your earnings (by law).  So there's not much to worry about there as long as you don't sell more than your contributions over the years.  (until age 59.5)  Conversions from your t-IRA will count as contributions as well.

If you're selling from your taxable account, you should have the ability to pick how you'd like your shares/funds sold.  Vanguard has a choice of first in first out, last in first out, or specific ID.  Personally, I chose specific ID so that I could pick which investments to sell and manage my own cost basis.  Check with your broker (if not Vanguard) to see what options they have.
« Last Edit: April 28, 2016, 01:05:06 PM by Eric »