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34 - Planning Controllables Part 6 - Optimizing Your Withdrawal Sequence

34 - Planning Controllables Part 6 - Optimizing Your Withdrawal Sequence

March 31, 2023

Ideal For: Prudent Investors Initiating Withdrawals from Their Investment Portfolio

Illuminating The Strategy: Deciding the order of withdrawals from different account types (taxable, Roth, traditional IRA/401k) to achieve your financial objectives in the most efficient manner.

Who Stands To Gain? If you're embarking on the journey of portfolio withdrawals, this strategy is designed for you.

Why Should You Care? The sequence of account withdrawals is not arbitrary; a strategically planned sequence can significantly influence your financial outcomes. Here's how:

  1. Maximizing lifetime after-tax income: By drawing from taxable accounts first and leaving tax-advantaged accounts (like Roth and traditional IRA/401k) to grow, you may be able to maximize your lifetime income after tax.

  2. Maximizing inheritance or charitable contributions: If leaving a financial legacy is your goal, strategically withdrawing from different accounts can maximize the post-tax value of your estate or charitable contributions.

Your Next Move: Start by defining your financial priorities and objectives. Engage a financial advisor to explore the optimal sequence of account withdrawals that best aligns with your goals. Remember, your withdrawal sequence can make a substantial difference in achieving your financial outcomes. Strategic planning today can lead to more satisfying results tomorrow.