I like Pralana but would like to model withdraws into a taxable account prior to having to take an RMD.
I.E. - Take $100,000 from IRA and reinvest into a Taxable account.
Is that possible? Or has anyone done it?
I think that I figured it out. I added scheduled withdrawals.
@mjzoltoski229 Correct, scheduled withdrawals are the best, direct, intentional way to do this. However, be aware that if you schedule withdrawals or they happen regardless (RMDs, unschedule withdrawals) from your IRA, Roth, etc those go to your cash (checking/savings) by default. If they exceed your designated cash ceiling amount, the tool will assume (and show you) a transfer to your taxable brokerage account.
If you want to force a withdrawal from your IRA to taxable, then you are on the right track.
But it's not clear to me what financial goal you are trying to accomplish by doing that. Because taxable account tax drag is your enemy, it's often a much better strategy to draw the taxable account down before pulling any money out of tax deferred. If you do succeed in drawing down your taxable account to zero, Pralana will then automatically turn to the next account in order of preference. The default is tax deferred as the next source of funds, but there is an optimizer to check to see if that is right.
If you are pulling money out of tax deferred to level out later RMDs, then Roth Conversions would generally be a better strategy. You may want to go to Analysis - Roth Conversions and run the optimizer to see if Roth Conversions benefit you. Note that if you are holding different asset allocations in different accounts (putting bonds and other fixed income preferentially in tax deferred is usually recommended to be tax efficient), then you must use Advanced Portfolio Modeling and then on the sub-tab labeled Asset Allocation/Location, select Mode 2 and then select the order of preference for which accounts should keep stocks. If you don't do that, your asset allocation will vary over time and Roth Conversion benefits will be wildly overstated. Note that Pralana is the only program I know of that allows you to hold your asset allocation constant and still hold different assets in different accounts, the competitors' programs will all give terrible answers.
Getting Roth Conversions right is the hardest analysis to do, be sure to come back and tell us what you did and ask questions before actually acting on anything you see.
I am a new user as of today. I purchased Pralana to model two aspects of our financial strategy that I could not model using Boldin or Wealthtrace:
- withdraw from separate taxable accounts, in order, while leaving another taxable account untouched
- rebalance automatically across all accounts whenever withdrawals or Roth conversions are made
I created three separate Taxable accounts:
- one with tax-free municipal bonds (to get tax-free income (interest plus sale of principal) while we do Roth conversions)
- one with slightly appreciated stock (to sell while or or after we run out of the municipal bonds)
- one with highly appreciated stock - which we intend to hold until cost-basis step up.
How can I model this in Pralana?
I can see the three accounts in Build>Account Initial Balances), when I get to Build>Withdrawal Priority, I don't see the three separate accounts - I only see one "Taxable Investment" account.
Being able to do this was my whole reason for purchasing Pralana. Am I missing something?
@jason-blattyprotonmail-com Pralana does not model multiple taxable accounts. We allow you to specify multiple accounts on the account initialization page but the tool then combines them and treats them as a single account going forward.
Stuart
Thank you.
Thank you.
it looks like I’ve been able to closely approximate my planned drawdown of municipal bonds prior to Social Security start, by defining a series of one-year stages in the advanced portfolio model
