Withdrawal Order in Moneytree Plan

Both the Aspire and Prosper modules use the same withdrawal order in the event of a shortage that causes asset withdrawals. The objective in Moneytree Plan is to start with the least qualified assets and leave alone tax-qualified assets alone as long as possible. The exact withdrawal order is based on the total assets in a give tax type. These totals are based on all assets with a given Type in the Assets tab of the Assets section:

• Taxable (such as savings accounts)

• Equity/Other (such as brokerage accounts)

• Tax Free (such as municipal bonds)

• Tax-Deferred (such as non-qualified annuities)

• Inherited Retirement Accounts

• Tax-Deferred Retirement Accounts (such as IRAs or 401ks)

• Roth Accounts

• Health Savings Accounts (HSAs)

There are a handful of exceptions to this withdrawal order they include:

• Required Minimum Distributions (RMDs) come straight from either tax-deferred retirement accounts or employer sponsored Roth accounts.

• Manually scheduled distributions modeled in a specific asset in the Assets are distributed from the asset pool that asset belongs to. The asset pool it belongs to is tied to the asset's selected Type.

• Total balance withdrawals occur in the last possible year from inherited IRAs that are distributed subject to the 5 or 10 year rules.

• Qualifying medical expenses come straight from HSAs before any other asset to take advantage of the tax free distributions. Qualifying medical expenses include:

  • Medicare Part B insurance premiums modeled in Miscellaneous Insurance

  • Long-Term Care insurance premiums modeled in Miscellaneous Insurance

  • Other Medical Expenses modeled in Itemized Deductions