Don’t Be Dogmatic About Retirement-Portfolio Withdrawals

Required minimum distributions first. Taxable accounts next, followed by traditional IRAs and 401(k)s. Roth IRAs and 401(k)s last.  That’s the standard sequence for tax-efficient portfolio draw down during retirement. The overarching thesis is to be sure to tap those accounts where you’ll face a tax penalty for not doing so (RMDs) while hanging on to the benefits of tax-sheltered vehicles for as long as possible. Because Roth assets enjoy the biggest tax benefits–tax-free compounding and withdrawals–and are also the most advantageous for heirs to receive upon your death, they generally go last in the withdrawal-sequencing queue.

Read the rest of the story.

Have questions?  We can help!  Contact us at 407-869-9800 or click here to send us your request.