Spend Down Withdrawal Feature

I just purchased ESP and my wife and I are not clear on how the spend down is done.
1. Does the program tell you when and how much to take from Regular Assets and IRA in a given year? Our assets are are almost 50/50. Do you have to make the decisions Would you please explain? We have purchased the 199.00 program and it shows as a feature. Is there a report that breaks out amounts respectively?
thanks in advance


The Total Income report shows withdrawals from your Retirement Accounts and the Regular Assets report shows your savings to or withdrawals from your Regular Assets Accounts.


Thanks for your comments. Does the program look at your asset distribution and determine what bucket to withdraw from? Kotlikoff's book "Clash of Generations" talks about taking distributions from IRA funds first, and doing Regular Assets later. The report(s) I have run, show taking withdrawals from Taxable account till 65 then taking IRA monies. My wife and I are soon to be 60, doesthis make aa difference? As I mentioned, our assets are almost 50% IRA and 50% taxable.


ESPlanner takes withdrawals from Regular Assets until these conditions are met for retirement accounts: (1) withdrawals necessary to meet Required Minimum Distributions after age 70, (2) Special Withdrawals, (3) Smooth Withdrawals, and (4) as necessary to meet your standard of living if there are no Regular Assets available.

The order of retirement account withdrawals is set on the Smooth Withdrawals tab of the Retirement Accounts page.

So, you can control the order of withdrawals from Regular Assets or Retirement Accounts by use of Special and Smooth Withdrawals.


Hi Mike,

I turn 65 in 2915 and my ESP report recommends beginning withdrawal from my retirement accounts even though there are funds in our taxable joint account to fund about 4 more years of our retirement. We have no need for special withdrawals. I wonder why?

Hi All,
I am wondering if someone from ESP could comment on both my and Mike O'Conner's posts. MY Vanguard CFP is advocating depleting taxable accounts first. ESP shows a dramatic decline in standard of living when I force it to do this by delaying age of first withdrawal from retirement accounts until 70, rather than the current recommendation of 65 (next year)
Nick Branch

dan royer's picture

Hi Nick,

Sorry that I'm not sure that I understand completely. When you say, depleting taxable accounts first, do you mean your regular assets? I think that's what you mean. The reports are pretty transparent on this, and your Vanguard guy must just be using a rule of thumb or something. He can't know (without using ESPlanner) what all the precise tax consequences are for example or how this all plays out across your economy.

It seems to me you already are seeing the optimal solution. You should be able to create both models and see pretty clearly WHY not depleting regular assets is the correct way to go. You could purchase one-on-one help at this site, but it seems you already have it figured out.

Hi Nick,

I'd say this a bit differently. ESPlanner is showing the results of lifetime consumption smoothing per your specific inputs. As you've shown, one set of (non-optimal) inputs results in a reduced standard of living. With sensitivity testing and some experimentation, you can attempt to maximize the results further or perhaps through the one-on-one help option mentioned by Dan.

Anyway...unless you have some pressing reason to believe the CFP over ESPlanner's results, your course seems clear.


Nick, what is the origin of "the current recommendation of next year"? Is that from the default setting in ESP? If so, I believe it's exactly that - default. (Dan R, can you confirm?)

Assuming that's the case, no calculation went into determining that 65 was better than 60 or 70. It only calculates the result of that setting. Clearly ESP concludes that beginning smooth retirement withdrawals at 65 has a better result than delaying retirement withdrawals until 70, but I don't think it "picked" that as better.

As Brian observes, though, adjusting that and other options may result in even better outcomes. If you're already retired, consider changing the first date of smooth retirement withdrawals to this year. That may or may not be advantageous. Only by testing can you confirm that.

Chris Cowles
just another user

I am a new user and find the same issue as described in these series of posts. I have sufficient taxable assets to fund the early years of my retirement to the smooth consumption level estimated by ESP. Both taxable and non-taxable portfolios have the same asset allocation. It does not make sense to me to withdraw from both the taxable and non-taxable portfolios concurrently. It makes more sense to me to let the money in the tax advantaged portfolio accounts grow as long as possible tax free (reinvesting dividends & interest) until those funds are required to fund the consumption level.

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