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.
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:
In most, but not all, cases this order yields the least tax-burden. OnTrajectory, however, allows you to easily experiment 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.
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:
If at anytime, you wish to return to the default order, simply click the "Reset to Default Order" button.
In addition to the default order, OnTrajectory stores over 50 sequences that may yield a larger amount at your Trajectory End Age, 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:
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.
If you wish to designate either a one-time or multi-year amount to drawdown from an account, you can do so by creating a new age range and entering a negative amount for the contribution. The amount will be removed from the account and taxes assessed accordingly. The funds will be deposited into your "Default Account".
This feature gives you the ability to further define your personal Drawdown Strategy. It could be either a one-time drawdown, by defining an age range with same start and end age — or it could be for a number of years.