I have 100% bonds in my TIRA. So, it's not emotionally for me because bonds aren't as volatile as stocks. I retired in early 2001. The company I worked for began their 401K plan around 1987 or so (a small match by the company was part of the plan). We weren't allowed to invest in stocks until 1991. So I only had a decade to invest in the stock market using my 401K (now part of my TIRA). I did invest the maximum amount that was allowed back then (no near what is allowed today). I did invest in a TIRA during that time span as well. The max amount allowed was just $2,000/yr. Because of this my taxable account today is considerably more than my tax-deferred account.Theoretically you can look at it as follows.
Logically you are invested because you belive assets grow over long term. Thus probability of the assets being higher at the end of the current year vs beginning of the year is higher. Otherwise why would you even invest? Thus mathematically one should wait until near the end of the year
But emotionally if the assets went down during the year you will now be taking out proportionately more from the assets than if you had taken them out at the beginning. Now you have regrets. Since taking out is “required” and you are forced to sell it low
Thus the decision is based upon what type of personality you have. logically optimum or emotionally avoiding regret?
Bottom line is I do my RMD around December 10. I withhold my yearly estimated federal tax (using the safe harbor method). I have an automated RMD set up with Vanguard, but I need to determine the correct income tax percentage withheld. I'm still waiting for Vanguard to allow me to withhold my state tax as well. Until then I'm stuck doing estimated taxes for the state.
Statistics: Posted by minesweep — Wed Jul 24, 2024 1:36 pm — Replies 27 — Views 2484