Hello, new user here looking for advice on a way to schedule withdrawals from my taxable investments. I will be retiring in four years at which time my privately held company requires me to sell back their individual stock shares that I currently hold in a taxable account. This purchase (or buy back) is scheduled to occur over a five year period immediately post retirement and will result in my having to pay capital gains taxes on hundreds of thousands of dollars for each of those five years. I'm just familiarizing myself with Pralana, but if I'm understanding correctly, the program wants to withdrawal from my taxable investments ONLY what I need to fund the gap between annual income and annual expenses. This will be much less than what I will be required to liquidate and hence Pralana is not accurately projecting the tax impact of this event. Does anyone have any suggestions for a work-around? Thank you in advance.
While Pralana has the ability to specify scheduled withdrawals from several accounts, the taxable investment account is not one of those 'source' accounts.
There is an open enhancement request to allow scheduled withdrawals (transfers, really) from any account to any other account -or- a transfer out-of-plan.
I don't have a specific ETA, but it will likely be in the next month or so.
Charlie, Pralana
@vortizcnm12 I'm a new user myself so can't offer much. I don't see any easy way to do it. The easy way to accomplish it would be if Pralana Online allowed Scheduled Withdrawals from a taxable account as they do tax-deferred accounts. It may be that this is a situation that the designers simply have not seen before. You may want to see about suggesting adding that functionality. It wouldn't be a simple change, but it should be possible.
@charlietest
It's great that the option of scheduled withdrawals from taxable account will be added!
Meanwhile, before this happens, i'm wondering as a brute force work-around might be to use the option of adding an annutiy (income) might handle this situation. Would need to fake the program and play around a little with the program inputs to make it work, but might be able to set the cost of the fake annuity and payout to match the expected cash flow and capital gains. The annuty option allows the user to specify that the funds to purchase it are coming from the "taxable account". Then it allows specifying the yearly payout start and end and the yearly amount as well as the % will be taxable. If for example, the situation is one of trying to simulate $100,000 of stocks that after all the capital gains, etc turns into let's say $50,000, then would specify that the annutiy costs $100,000 and that the payout lasts only 1 year and that the payout is only $50,000 and adjust the taxable input as required. The result would see that $100,000 is removed from the taxable account and also that there's a new income stream of $50,000, etc... If this was to take place for more then 1 year, can have the payout for a specified number of years and for a specified amount each year. These seem like enough sort of "psedo" parameters to sort of fake the program into using funds from the taxable account as well as specifying the cash flow and for how many years to simulate this situation.
Might this work as a quick and dirty approximation?
Thoughts?
This might work, one would need to try it and see. I am traveling for the weekend and will be driving all day. I can check it tomorrow. But it would not be too difficult to modify Pralana to allow withdrawals from the taxable investment account as long as there is no special treatment for LTCG for that specific withdrawal.
Charlie
I'm wondering whether this (still future?) capability to schedule withdrawals from Taxable accounts will help with my issue...
I'd really like to run some modeling for how best to withdraw selectively from Taxable and IRA accounts over the next 3-4 years, while we're managing ACA subsidies. I'm looking for the long-term implications to my plan, since I can figure out the annual short-term implications fairly well.
Having the LTCG taxes (and correct ACA/Healthcare cost projections) show up in the actual sell/withdrawal year would be a big help! But will it be designed to work with a negative cash flow situation - we're retired and currently don't have much income other than our investments.
Thanks for your thoughts
