I’m 62, retired for one year. I’m using the VPW (Variable Percentage Withdrawal strategy) provided by longinvest and like its simplicity and flexibility. I’ve created scenarios with it which I find useful.
The basics
Three years cash/IBonds living expenses
Debt: 0
Tax Filing Status: Single
Tax Rate: 12% Federal, 4% State
State of Residence: CA
Asset allocation target range: 50-60% stocks 50-40% bonds
Total portfolio
650K
BND index bond fund, SWTSX Schwab Total Stock Market Index Fund
Current retirement assets
Simple IRA 14% BND 19% SWTSX
Roth IRA 17% SWTSX
Taxable 6% SWTSX
I bonds 3%
403b TIAA-Cref Annuity 3% minimum fixed rate 30%
CDs/Savings 11%
Other useful information:
- In 2021 I started moving $10k of CD funds into Ibonds. I plan to do that this year and into the future, tax implications permitting.
- For the last 2 years I’ve done Roth conversions (within my tax-bracket), 2022 I will as well, and into the future to the extent I can considering the taxes.
- I plan to take social security as late as possible 67-70, but would also take it at 65 if it made sense.
- The CREF Annuity is the wild card in the game. I can take a lifetime income (which I’m leaning towards) or take it in increments over a couple of set periods.
- I currently withdraw 30% less than my annual withdrawal rate provides for.
I’m 85% certain taking the Annuity as lifetime income is the right way to go. It gives me piece of mind. On the other hand, when I figure it into my AA, my annual income is slightly higher. What else should I consider?
Question 2
If I take the lifetime income, when should I start? If I took it in lots over 5 or 10 years, when should I do that? In both cases, there are the taxes to consider. Is there anything else I should consider?