Hi.

We use our TFSA accounts as an Emergency Fund, so when I run the WITHDRAWAL OPTIMIZER I don't want it to withdraw anything from these accounts, so I set their Withdrawal PRIORITYs as follows: Bottom of list of Withdrawal Accounts with Limits % = 0.0.

But when I run the WITHDRAWAL OPTIMIZER it (still) withdraws a few thousands of dollars from these TFSA accounts in the first 5 years, and then deposits money in the remaining years.

It's not a huge deal in my long-term financial planning, and I suspect it has something to do with the complexities of the WITHDRAWAL OPTIMIZER algorithm explained in the eBook (p.99), but is there a way to set things up so that it never withdraws from a certain account?      Then I won't have to answer that question when my spouce eventually asks. 😉

Thanks for great application.

Paul D.

Hi,

A regular TIME MACHINE run follows your orders as you set them up with your PRIORITIES and AUTOMATIC SAVINGS/WITHDRAWALS.

However, the WITHDRAWAL OPTIMIZER runs ignores those orders. It does what it needs to maximize your legacy. There is no way to restrict it to give you a sub-optimal solution.

Thanks

Thank you, that's what I thought.  I understand the need to keep things simple, but could such an option be considered for a future version? Like:

  Limit % = "0.0" (or a new Checkox field) for each ACCOUNT (and/or perhaps each INVESTMENT) to tell the WITHDRAWAL OPTIMIZER to not touch it.

Could possibly be useful for other purposes?  Thanks again.

Suggestion - small wording change:

This plan has been optimized for withdrawals after retirement and ignores some of your set deposit/withdrawal PRIORITIES (and associated Limit % values) and automatic SAVINGS/WITHDRAWALS.

Those TFSA withdrawals do make it tricky for me to plan RRSP withdrawal. How do I get around that?

I guess I could simply delete these TFSA ACCOUNTs and just not worry about the investment growth within these, Net Worth, etc.

Or is there another trick/approach I could use?

Thanks.

The Withdrawal Optimizer algorithm finds the optimal withdrawal strategy in retirement that maximizes your legacy. The way it works cannot handle limits put on it as you suggest. Using the TFSA as an emergency fund is a fine strategy. I would not recommend deleting your TFSA account for the Optimizer, as that makes your scenario completely wrong. The Optimizer gives you an optimum strategy, but you don't have to follow it in real life, it's just an indication that you could do better. It actually tells you how much better, so is it significant? If it makes a large difference, then it's worthwhile to look in more detail at what it's doing to learn from it, and you can probably improve your set withdrawal strategy for regular TIME MACHINE runs. If it's not significant, then don't worry about it, do what you were going to do as you told the TIME MACHINE.

Ok, thanks. I understand and that makes sense. The TFSA numbers I'm dealing with aren't that large, so I can just tweak these manually in the spreasheet. I will probably just add a column to do that, and update that column if anything changes, to keep track.

Thank you again.