Finstream.TVFinstream.TV
  • Home
  • Videos
  • News
  • Contact
  • About
  • Home
  • Videos
  • News
  • Contact
  • About
Searching videos

How To Withdraw Money From Your Retirement Accounts in the Most Tax-Efficient Manner Possible

When it comes to generating income in retirement from your various accounts, conventional wisdom would have you withdraw money from your taxable accounts first, then your tax-deferred accounts and, finally, your Roth account.

And, there’s some logic to this approach, says Roger Young, a senior financial planner and vice president with T. Rowe Price Associates. “If you draw from taxable accounts first, your tax-advantaged accounts have more time to grow tax-deferred,” he noted in a recent paper, Retirement Pulse: Tax-Efficient Withdrawal Strategies. “Leaving Roth assets until last provides potential tax-free income for your heirs. Plus, it is relatively easy to implement.”

Unfortunately, he noted in the paper as well as in our Retirement Daily podcast, the conventional wisdom approach may result in income unnecessarily taxed at high rates. What’s more, he notes, this approach does not consider the tax situations of both retirees and their heirs.

In our Retirement Daily podcast, Young discussed how best to generate tax-efficient income in retirement given the three objectives retirees may have: extending the life of their portfolio; more after-tax money to spend in retirement; and bequeathing assets efficiently to their heirs.

The essence of our discussion: Investors who have more than one type of account for retirement—taxable, tax-deferred, and tax-exempt (Roth)—should take advantage of those accounts’ different tax characteristics.

Leave A Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Financial Advisor Center
  • Find a Financial Advisor
  • Advertise with FinStream
Video Categories
  • Original Series
  • Life Events
  • Tax Planning Center
  • Financial Planning
  • Financial Advisor Center
Featured Financial Experts
  • Professor Mike Milligan
  • Becca Craig, ABA®, CFP®
  • CJ Miller, CFP®, RMA®
  • Haley Tolitsky, CFP®
  • Jeffrey Levine, CPA/PFS, CFP®
  • Dana Anspach, CFP®, RMA®
  • Jae W. Oh, MBA, CFP®, CLU®, ChFC®
  • Tony Davidow
  • Massi De Santis
  • Doug Buchan, CFP®
  • Kurt Wunderlich, CFA, CFP®
  • Lee Baker, CFP®
  • Robert Klein, CPA, PFS, CFP®, RICP®, CLTC®
  • Home
  • Videos
  • Subscribe
  • News
  • Glossary
  • About
  • Contact
  • Privacy
  • Terms
  • Opt-out preferences
Revoke consent

© finStream.tv 2023

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage {vendor_count} vendors Read more about these purposes
View preferences
{title} {title} {title}