Withdraw from a specific account

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rsn010
Posts: 2
Joined: Wed Feb 12, 2020 1:01 pm

Withdraw from a specific account

Post by rsn010 »

Is there a way to specify a particular account (taxable, tax free or combination) for a large withdrawal (ie for a new home)? As you can imagine, the effect on taxes could be substantial. Thanks...as always
jimr
Posts: 725
Joined: Thu Feb 28, 2008 6:48 pm

Re: Withdraw from a specific account

Post by jimr »

You could use a negative savings cash flow out of the desired portfolio, but you have to understand that this is a hack that short circuits the normal expense handling code of the simulation.

Also, if you're taking the withdrawal from a tax deferred account, you'll need to create a separate expense cash flow to cover any taxes due on the withdrawal. Alternatively, you could just net up the negative savings cash flow to cover the taxes due.

Also, when using this approach be aware that there's an implied assumption that there's enough in the portfolio to cover the negative savings cash flow. (the portfolio won't go negative, but if there isn't enough in the portfolio to cover the withdrawal, no failure or error is reported and the simulation just keeps on running until the end of the plan as if it never happened).
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