Which accounts should you withdraw funds from first in retirement?

Which accounts should you access first for income in retirement? A good retirement income plan can make or break your retirement. Retirement distribution planning is more complex than saving for retirement.

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[Cesarinaella]

I came across your channel through this video—case studies are incredibly valuable, and I'm eager to see more in the future! Building wealth involves establishing routines, like consistently setting aside funds at regular intervals for smart investments.

[kjrey]

Great presentation. There is one more thing that can be added in the "Tax Advantaged" bucket, an "HSA". It goes in Pre-Tax, the balance over a prescribed limit can be invested and earn market returns, and (as long as the money is used for an approved health expense) is also Tax Free to spend anytime.

[kangre]

I just found your channel. I really appreciate your calm and systematic method of teaching us. Thank you so much. I have subscribed.

[locutusdborg]

If you develop a dividend strategy you do not have to pull funds from anywhere, you just let the dividends pour in.

[danieldoucet]

The best place to draw funds from is someone else's account.

[dmsoundcollective]

You are simply amazing... my wife and I are so worried about this topic that I started the process of your 20-page report for strategies. Unfortunately my wife and I did not start a 401k or Roth until we turn 55 so we have a sort of an uphill battle going on LOL

[jhors]

Thank you for posting this helpful and informative video

[gardeningforfunandlongevit]

I totally agree with the person who said that you did not clearly answer the question posed in the video. Thank goodness I have my financial totally together but was curious if you would answer the question. I think that in your previous videos you have done a good job of clarifying details but not in this video.

[evanclark]

At 10:00. I know you're simplifying for your comparison, but tax rates for tax advantaged and tax postponed really aren't the same. Tax postponed contributions reduce tax at the *marginal* rate but distributions are taxed at the *average* rate (all else being equal). For example, if you contribute to a 401k while making $150k/yr, you reduce taxes by 24% of the amount saved. But later if you withdraw $150k/yr, assuming your 401k distribution is your only income, it will be taxed at all tax rates starting at 0% (for the standard deduction) and only a fraction will be taxed at 24%. Even if you have SS (or some other source of fixed income), your 401k distribution will be taxed at the average rate starting with where SS leaves off--which I guarantee won't be in the 24% tax bracket!

[comingshortly]

If you don’t need the money then the taxable brokerage account is the same as the tax advantaged for your heirs and you can argue the brokerage account is better during your lifetime as you can harvest losses as well as deferring gains and passing it on with a step up in basis. I have had a brokerage account for 40 years and never paid $1 of capital gains (although I do have some dividends and harvest my losses annually). My plan is to try to spend down as much of my tax deferred money as possible and let the rest grow to be passed down tax free.

[CampsitePyro]

I just plan on living off my pension, rental income, and social security. My 401k and IRA are reserved until RMD time, and the remaining balance for the kids upon my death.

[JonathanBram]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[comingshortly]

My breakdown 60% tax deferred. 25% taxable brokerage with high cost basis and 15% tax free (including house and life insurance and small Roth).

[cbass]

Thank you…I’ve been thinking about this lately.

[Icebrg]

You never answered the question posed in your title. Was this video click bait for plugging your book? I'm disappointed.

[Ellis]

I think using a marginal tax rate is more realistic, 25% on 38k isn’t realistic and hasn’t been for decades. This is a great demonstration thou!

[straitjacketstudios]

I find it very interesting that we always presume the taxes will be higher in the future. And while I think all of us would agree and it is very logical for future tax planning purposes, if we are to go back in time to those that were using this philosophy years ago, then they were screwed by the tax cuts and jobs act which lowered taxes for a number of years for everyone. Anyone who aggressively pursued this philosophy back then ended up spending more in taxes.

[rdspam]

6:12 How is an RMD tax postponed? Isn’t it, by definition, a taxable distribution? Similarly, how is ”ordinary income” qualified/tax postponed?

[curtisdarveau]

My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit

[tonyLA]

For most people, their taxable income will be much lower once they retire. Which means they will be in a lower tax bracket. You didn’t mention that.