Episode 417: You're Withdrawing From Your Retirement Accounts in the Wrong Order

Most retirees are told to spend one account at a time, but a smarter retirement planning strategy treats every account as part of a single income system.  David McKnight shows how to use the quiet early years of retirement to your advantage, and why the order you draw your income may matter less than you think. Show Notes One of the most common pre-retirement questions is which account to spend first: brokerage, IRA, or Roth IRA. Conventional advice says spend taxable money first, then tax-deferred, and Roth last – David agrees with the first part, but not for the usual reason. If you retire at 62, your paycheck disappears, Social Security hasn't started, and RMDs are years away. That's what David calls the "Retirement Income Valley". David recommends to fund your lifestyle from your brokerage account so that you can use your lower brackets to convert your IRA to Roth. You're using your brokerage account to buy tax bracket capacity, typically a five-to-eight-year window bef...