Today’s tip will cover “Which retirement account should I withdraw on first?”
If you have a combination of taxable accounts and tax deferred accounts saved for retirement, a straight answer would be to withdraw money from your taxable and tax-free investment accounts first and then your tax deferred money such as IRAs, 401K and annuities. However, if you are subject to a Required Minimum Distribution, then you may want to consider taking your RMD first and then withdraw money from your taxable and tax-free accounts. The best choice for you may have an impact on your taxes, so my suggestion to review your own current situation to see what is best for you and your lifestyle plan. For your specific tax related questions consult with a tax advisor.
Catherine Magaña is a CFP® or CERTIFIED FINANCIAL PLANNER TM in Carlsbad California. If you would like to set up a time to discuss your financial goals she can be reached at 760-692-5700, firstname.lastname@example.org