Withdrawal Sources

[mountainsoft]

When we retire we will have my wife's pension, my traditional IRA, and each of our social security payments (at different stages of our retirement).

Does FRP assume our income will come primarily from the pension and SS payments and figure out the remainder from my IRA?

Thanks,

Anthony

[jimr]

For each year of the simulation, the planner considers the amount of spending that needs to be funded, then subtracts any income that the retiree(s) have listed for that year. The difference determines the amount of the total spending that must be funded from portfolio withdrawals.

Depending on the settings, the withdrawal will be taken from the taxable portfolio first. If the taxable portfolio is depleted, any remainder withdrawal will be taken from the tax deferred portfolio, and finally from the tax free portfolio once the deferred portfolio is depleted.

In the case of withdrawals from the tax deferred portfolio, the total withdrawal is 'grossed up' so enough funds are withdrawn to cover expenses needed and the tax due on the withdrawal amount.