No, because you need taxable accounts to smooth discretionary spending.

You can model using more retirement accounts money early on by overriding smooth withdraws with extra special withdraws. So if smooth withdraws has you withdrawing 20K per year try special withdrawals of 30K per year for 5 or ten years and then just see if your discretionary spending goes up. I predict it will not, but models are complicated. When you do that, you'll see that your withdraws from regular assets goes down.

In short: test your theory and see.

Dan

Of course you can't defer the withdraws on your qualified accounts forever. The IRS will require you to start RMD required withdraws at age 70. So you could set the start date for smooth withdraws to age 70. This will cause the program to use Regular Assets (taxable accounts) to supply liquidity for your discretionary spending. You could also start your qualified smooth withdraw at, say, age 80, and this will cause the program to calculate and impose RMD from age 70-79, in effect using even more taxable account money (regular assets).

I'm skeptical of blanket rules of thumb like you describe. I've seen too many models where the conventional wisdom simply doesn't apply for reasons unique to the model. Maybe someone has a pension, for example, that disrupts the assumed tax advantage or perhaps rental property income interferes, or a spouse is still working that changes things, etc. But this is why you test the theory in the program. The theory sounds good, but you'd need to test it to see if it indeed raises annual discretionary spending. In this case it's easy to test. Just change the state date of smooth withdraws in your Retirement Account setup.

Dan

Yes, there it is: "Select age of first smooth withdrawal" That's the second one or middle one in each of those two groups. So, using my example in my previous response, you can start smooth withdraws at age 80, and RMD will begin at age 70-79 and the the balance withdrawn smoothly from 80-100.

Make sense?

Dan

In that screen shot, you have the first smooth withdraws set to age 64 and 65. If you look in the retirement account report for each of husband and spouse, you should see the smooth withdraws begin at 64 and 65 respectively. After those ages you will still see withdraws from taxable accounts--the program uses taxable account money (regular assets) to smooth discretionary spending. But if those settings are used, you'll see no retirement assets before age 64.

Can you double check that?

Dan

We should probably use a support ticket and let me take a look at your database. I understand what you are asking but I can't figure out why you want to do that or what the goal is in doing that. The explicit goal of withdrawing all of your regular assets before retirement accounts begin seems completely arbitrary. What's the point of doing that? Are you wanting to have a higher living standard before retirement as opposed to after? Are you wanting to spend that extra money on something? If so, just create special expenditures in the years prior to age 64 and 65.

The program is trying to smooth your discretionary spending. The saving/dissaving of regular assets is the governor on this system keeping your living standard smooth. If your living standard was lower pre-65 than post-65 then the program would indeed withdraw those regular assets and zero you out in the year before the retirement assets begin. But if that's not the case, then this means that you have the same living standard before retirement assets begin that you have after. Thus, the program is saving those regular assets for years it sees in the future when, without them to withdraw, you'd suffer a hit to your smooth discretionary spending pattern. So, again, I don't know what your goal is in wanting these assets withdraw before you need them when your living standard must already be smooth. If you want to spend that extra money on something, create a single or series of special expenses to represent that extra spending in the pre-65 years.

I hope that helps. If not, create a support ticket, upload your database, and I can help you from there. I suspect there's some misunderstanding here.

Dan