Early IRA Withdrawal - 5 Substantially Equal Payments

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ronh999
Posts: 2
Joined: Thu Jan 01, 2015 7:51 pm

Early IRA Withdrawal - 5 Substantially Equal Payments

Post by ronh999 »

Hi, appreciate the use of this tool. I was wondering if there is a way to enter an early (non-penalty) IRA withdrawal of 5 equal payments as allowed by the IRS. I would expect to see the system take funds out of the tax deferred account for the 5 years for the amount and the difference come from the taxable balance. I don't think I have found a way to do that as it takes taxable first, followed by deferred.

I tried a bunch of things under settings, but don't think any of them will override the amount taken from a portfolio for a fixed number of years. I was able to lower the Min IRA withdrawal age to 55 but results are probably skewed as the taxable money will be used before the IRA payments for those years.

Please let me know if you have any suggestions.

Thank you.

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Early IRA Withdrawal - 5 Substantially Equal Payments

Post by jimr »

Probably the best way to approximate this would be to completely remove the funds from the tax deferred portfolio right from the start. In other words, pretend the money was never in tax deferred and manually compute the net amount that will get added to the taxable portfolio each year.

Then create an Additional Inputs 'Taxable Savings' cash flow entry to add the funds into the taxable portfolio over 5 years.

ronh999
Posts: 2
Joined: Thu Jan 01, 2015 7:51 pm

Re: Early IRA Withdrawal - 5 Substantially Equal Payments

Post by ronh999 »

Thanks much for the response. That works pretty well. Suggestion if you like, may be to provide an additional input that would override funds to be used from a specific source, like tax deferred. This would override the default action for taking withdrawals which always takes taxable first. If that were provided, I would not need to estimate the future balance.

This is just a suggestion for you in case you think it may help the product. This tool provides analysis that has been very helpful for my planning and I very much appreciate it being available.

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