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You don't say what your housing situation is. Here is some speculation.

If you have a house with a mortgage, or a house without one on which you can create one, some other options present themselves.

Withdraw an amount equal to the interest payments on the mortgage. This taxable income (since all non-annuitized distributions are growth first, basis last [LIFO]) will be offset by the interest deduction. That washes out the tax hit. As it does so it will also free up additional currently available or income-generated dollars for investment. It also argues for creating a mortgage if you don't have one. That will create a lump sum to be invested for a longer time horizon, which will build up your capital gains treatment asset.

In connection with this, reposition the present value of anywhere between 12 and 24 months interest payments in the fixed account. This will give you stable dollars for distribution. Diversify the remainder, keeping a portion positioned for major growth and a portion positioned in more balanced positions. Replenish the fixed account periodically. If you do so when the aggressive account is showing above mean returns, do so from those funds; that will force you to lock in gains before regression to the mean. If the aggressive funds are producing returns lower than the mean, replenish from the balanced funds. That will give the aggressive funds more time to regress to the mean (recover their temporary loss in historical earnings).

Once you draw down the value to your basis you have solved your tax-treatment-at death dilemma. The remainder will throw off neither income nor capital gain liabilities. Just keep drawing it down to near basis at times when the funds are showing returns above their mistorical mean returns.

This may help you to accumulate more assets, while leaving the annuity basis available for withdrawal as needed without tax implications.

Hope this adds to your elegant planning endeavors.

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