Author Topic: Drawing down a LC IRA in retirement  (Read 3075 times)

JDowding

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Drawing down a LC IRA in retirement
« on: June 18, 2014, 06:36:07 PM »

I'm still a few years from retirement, but wondering if anyone has given thought to the best strategy for slowing drawing down an IRA over time?   

The only thought that has occurred to me would be to be able specify a "cash floor" in the account.   I am using Prime to automate my purchases (happy with that so far), but I think I'd want to be able to say to keep at least, say, $5K cash around for withdrawal purposes.   Anything above the cash floor I'd be happy for Prime to reinvest.

Any other thoughts come to mind?

Thanks

GS

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Re: Drawing down a LC IRA in retirement
« Reply #1 on: June 19, 2014, 12:50:47 AM »
I'm pretty sure with the Automation that I used (Peer Lending Server) you could have made it work with a "cash floor".  It allows you to specify a minimum cash balance before it attempts to make a purchase, and you can limit the number of notes purchased.  It's offline now due to the LC changes, and I'm not sure if or when it's coming back.

Fred

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Re: Drawing down a LC IRA in retirement
« Reply #2 on: June 19, 2014, 01:57:31 AM »
The only thought that has occurred to me would be to be able specify a "cash floor" in the account.   I am using Prime to automate my purchases (happy with that so far), but I think I'd want to be able to say to keep at least, say, $5K cash around for withdrawal purposes.   Anything above the cash floor I'd be happy for Prime to reinvest.

I am not aware of a "cash floor" feature in PRIME.

However, you can try the following options:
1. Pause PRIME, accumulate cash, transfer money out, resume PRIME.
2. Make your PRIME filters more stringent so they will find loans only rarely; setup periodic (weekly) cash withdrawal.
« Last Edit: June 19, 2014, 02:09:34 AM by Fred »

rlv99

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Re: Drawing down a LC IRA in retirement
« Reply #3 on: June 19, 2014, 02:49:43 AM »
I believe that IRA withdrawals should be based on need.  If you don't need the cash, then don't withdraw it thereby increasing your account value each month and minimizing the possibility of frivolous spending. Once you reach the age of 70 1/2, the IRS has minimum withdrawal requirements applicable to IRA's.  You can then schedule your withdrawals to comply with that formula which is what I do automatically on a monthly basis.

Be aware that SDIRA takes 6-7 business days (which I happened to think is excessive) for a withdrawal to show-up in your bank account.

ggnoob1337

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Re: Drawing down a LC IRA in retirement
« Reply #4 on: June 19, 2014, 02:21:22 PM »
I'd assume in a retirement you'll have a set amount to withdraw each month for your monthly income. So for example, lets just say I need $2,000 a month from LC. I would set my BlueVestment account to maintain a minimum of $2,000 in cash. Once it hits that $2,000 in cash, then it will start investing again. As soon as I make my monthly withdrawal, it will start over in saving up the cash. To do this most effectively, you'll want to make sure that you get at least that amount ($2,000 in this example) each month in interest and principal payments.

That's just what I assume I'll do. But I'm a long ways off from being able to withdraw from my LC IRA.

JDowding

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Re: Drawing down a LC IRA in retirement
« Reply #5 on: June 19, 2014, 03:28:13 PM »
Thanks for the responses.   I swear I did not see this yesterday, but after talking to a LC representative, they pointed out a pop-up menu on the allocation page titled "How to set a cash reserve".    Pasted below:

To set aside cash that will not be invested by Automated Investing, you can allocate less than 100% of your funds across Note grades. For example, if you would like to set aside 10% of your funds in cash, only allocate 90% of your funds across grades AG.

Your cash reserve allocation will appear next to the grey "$" beside the pie chart above.

Keep in mind that funds in cash will not earn any interest.


ggnoob1337

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Re: Drawing down a LC IRA in retirement
« Reply #6 on: June 20, 2014, 02:20:04 PM »
To set aside cash that will not be invested by Automated Investing, you can allocate less than 100% of your funds across Note grades. For example, if you would like to set aside 10% of your funds in cash, only allocate 90% of your funds across grades AG.

They should really change that to be a dollar amount or at least have the option to make it be a dollar amount. I'd just prefer that anyhow. But I don't use LC's automated investing anyhow.