Drawdown Preferences

The order in which funds are drawn-down from your accounts can have large consequences on the amount of taxes you pay, and ultimately on how long your money lasts.

The following topics will be covered in this Guide:

  1. Default Drawdown Order
  2. Manually Changing Drawdown Order
  3. Using Auto-Optimize

1. Default Drawdown Order

When cashflow is not sufficient to meet your Expenses or defined Account Contributions, OnTrajectory automatically draws funds to meet those needs. The first option is to "Draw from 'Default Account' First" — when checked, OnTrajectory will fully deplete your Default Account before considering the general preferences outlined below.

The default drawdown order, as previously mentioned in the guide "Modeling Accounts" is displayed below:

Drawdown Preferences

In most, but not all, cases this order yields the least tax-burden. OnTrajectory, however, allows you to easily expirement with different orders. Note: If two accounts match a particular preference (for example, if you have two Roth Accounts), the account with the higher balance is selected.

2. Manually Changing Drawdown Order

To manually change the order in which funds are removed from your accounts, simply click-and-hold on the arrow icon in the "Change Order" column. You can then drag that preference to any position, as shown below:

Drawdown Preference Dragging

If at anytime, you wish to return to the default order, simply click the "Reset to Default Order" button.

3. Using Auto-Optimize

In addition to the default order, OnTrajectory stores over 50 sequences that may yield better results, depending on your situation. To iterate through those sequences, press the "Auto-Optimize" button. As new sequences are tested, the result is displayed, as shown below:

Drawdown Preference Dragging

Once completed, the result that yields the highest final End Balance is selected and saved. Again, you can always reorder manually or return to the default order.