Cash Wedge Worksheet

Cash Wedge is a withdrawal strategy that attempts to avoid selling securities when the market is down. It is based on the assumption that bear markets typically recover within three years. The strategy holds three years of withdrawals in cash or cash equivalents in each of your accounts - called the cash wedge. In years when the markets are down, funds are withdrawn from the cash wedge. In years when the markets are up, securities are sold for the withdrawal and to replenish the cash wedge.

Average yield is the amount of cash (dividends and interest) that the account generates as a percentage of its balance. You must enter this percentage for all accounts except non-registered.

Advanced Strategy

A portion of the withdrawals may be account transfers suggested for tax optimization purposes. It is not necessary to hold transfer amounts in the cash wedge because it does not matter whether the market is up or down. Securities are sold in one account and repurchased in another or it may be possible to do an "in kind" transfer to avoid the sale and repurchase. Allow enough funds in your cash wedge to cover any withholding tax.