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Investing - Theory, News & General • Variable Percentage Withdrawal (VPW)

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Does anyone know how VPW works with Roth conversions? I'm struggling conceptually to understand how they impact filling in the portfolio balance and what your recommended withdrawal should be?
I only know that VPW is based on pre-tax money.
Why do you say that?
VPW is attempting to mathematically match the money available for taxes and expenses before retirement to that after retirement. The only way it can do that accurately, is if the inputs being used haven't been taxed yet. The standard inputs are social security, pension, and either earned income or tax advantaged retirement accounts - read all monies that are subject to income tax.
That doesn't make sense to me. It uses the entire portfolio and tells you what to withdraw. Some of it you will use to pay taxes. VPW doesn't know or care whether you withdraw from pre-tax or otherwise. That's up to you to figure out. I use taxable, tax deferred and Roth to target a particular AGI and the tax is just another expense.

Statistics: Posted by RyeBourbon — Fri Jul 12, 2024 8:15 am — Replies 2365 — Views 642901



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