What If I Have a Big One-Time Expense?

A new RV, a kitchen renovation, a dream trip, a wedding, or helping a child with a down payment — retirement has big one-off costs, not just monthly spending. This recipe shows you whether your plan can absorb a large lump sum, and when it hurts least.

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The quick version

1. Add a one-time expense in a specific year.
2. Save it as a named strategy — "Renovation 2030."
3. Run Comparison against your baseline — and try the expense in different years to see when it stings least.

Step by step

1. Add the lump-sum event. On the Strategy tab, add a lump-sum withdrawal event: a label, the calendar year, the amount (in today’s dollars), and whether it should grow with inflation to that date. By default the withdrawal is taken in that year using your normal account allocation — but the row’s Draw From dropdown lets you source it from a specific tax type instead (Taxable, Traditional, or Roth), which controls the tax hit of the expense. Sourcing from Roth or Taxable is mostly tax-free in the year you spend it; sourcing from Traditional adds ordinary income. See Strategy tab for how the sourcing cascade works.

2. Save it as a named strategy (the Strategies button) — "Renovation 2030." Save a few different years if you want to compare timing.

3. Run Comparison on the Compare tab; with Compare against baseline on (the default), your baseline is drawn automatically beside the expense version. Load Baseline (⤺) returns you to your plan.

What to look at

• Success Rate — does the plan still clear your comfort line after the expense?
• When you spend it matters. Try the same amount in an early year vs. a later year. A big withdrawal early in retirement does more damage, because that money would otherwise have had decades to compound (and selling into a weak early market is the sequence-risk trap). Later expenses usually hurt less.
• The trajectory dip — watch how far the portfolio drops in the expense year and whether it recovers.

If the expense lands before you retire

A one-time withdrawal only fires once drawdown begins — so a $50,000 down payment at age 50 modeled that way would silently never happen. RetireRange flags it in amber and offers a Convert → link that moves the event to the Pre-Retirement Withdrawals card, which is where accumulation-phase draws belong. (If you spot the timing yourself, just start there.)

Worked example — $50,000 out of a Traditional 401(k) at 50.

1. On the Strategy tab, add a Pre-Retirement Withdrawal: label it "Down payment," set the year and month, enter $50,000 gross, and pick the 401(k).
2. Open Penalty details. You’re under 59½ in a Traditional 401(k) with no matching exception, so the rationale reads "10% penalty on the gross" — the toggle label says so without expanding.
3. If $50,000 is what you need in hand, switch entry mode to "I need this much cash in hand." RetireRange grosses it up so the engine removes enough to leave you $50,000 after the penalty.
4. Enter your marginal tax rate to see the real cost: the net-cash line shows what actually reaches your closing table. That number is display-only — it never touches the portfolio, which loses only the gross.
5. Save it as a named strategy and compare against your baseline, same as any other expense.

Some draws are cheaper than they look. Choosing a Roth account and ticking Roth basis are two separate decisions. The account says where the money comes from; on its own, before 59½, RetireRange assumes you’re taking earnings, so the 10% penalty applies. The Roth basis checkbox (in Penalty details, shown for a Roth IRA before 59½) says you’re taking your own contributions instead. From a Roth IRA, contributions come out first, at any age, with no penalty and no income tax, so tick the box and the whole gross reaches your hand.

A few caveats before you tick it:

• RetireRange doesn’t track your basis. Ticking the box is your assertion that the amount is no more than you’ve contributed.
• It’s a Roth IRA rule, so the box appears only on a Roth IRA. A Roth 401(k), 403(b) or 457(b) doesn’t release contributions first: an early withdrawal is part contributions, part earnings, and the earnings share is penalized and taxed. On those accounts an amber note takes the box’s place, and RetireRange treats the whole withdrawal as earnings. That leans pessimistic, since it can’t see your basis.
• Unticked, the withdrawal is taxed as income as well as penalized. The whole amount goes into that year’s taxable income in your results. An exception or the Rule of 55 removes the penalty, not the tax.
• The dollars still leave the account, so the legacy cost is real even when the tax cost isn’t.

Run it both ways and compare.

Some exceptions cap out. First home is exempt only to $10,000, birth or adoption to $5,000, the emergency withdrawal to $1,000 a year, federal disaster to $22,000. Pick a capped exception on a larger draw and the penalty toggle defaults on for the whole gross, with the rationale spelling out the arithmetic. Flip it off only if you know the exemption covers your full amount.

Rule-of-thumb comparison worth running: the same expense funded pre-retirement versus delayed until after you retire. The early version loses the compounding and pays the penalty; sometimes waiting two years is worth more than any funding choice.

If it’s more than the plan can take

• Spread it out — model it as two or three smaller events in different years instead of one big hit.
• Delay it to a later year when the portfolio is larger or the horizon shorter.
• Trim ongoing spending modestly to make room, and compare.
• Pair it with good timing — avoid stacking a big expense onto a year that already has a large RMD or Roth conversion.
• Change where it’s funded from — use the Draw From dropdown to pull the expense from Roth or Taxable (mostly tax-free that year) rather than Traditional (ordinary income), and compare the tax and legacy impact.