Retirement Income Strategies: IRA vs. Brokerage Withdrawals (The Tax-Smart Choice for Retirees)
06/25/24 • 33 min
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Mark asks a common question – What should I do regarding my withdrawal strategy? Should I first pull from my brokerage account or my IRA?
There is no one-size-fits-all answer, but James provides a framework for creating a strategy to increase your odds of getting the most out of your money saved. He walks through the pros and cons of first pulling from your IRA versus a brokerage account, taking into consideration required distributions, tax rates and strategies, capital gains, Roth conversions, tax gain harvesting, and charitable giving.
Questions answered:
What are the tax implications of giving to family members versus charities?
How should capital gains affect my withdrawal and tax strategy?
Timestamps:
0:00 - Mark’s question
3:12 - Pros of pulling from IRA
7:24 - Lower tax rate today
9:27 - Cons of pulling from IRA first
11:38 - Charitable giving
13:58 - Pros of brokerage pulls
18:40 - Other potential pros
21:39 - Cons of pulling from brokerage
26:03 - Things to consider
30:50 - Wrapping up
Create Your Custom Strategy ⬇️
Mark asks a common question – What should I do regarding my withdrawal strategy? Should I first pull from my brokerage account or my IRA?
There is no one-size-fits-all answer, but James provides a framework for creating a strategy to increase your odds of getting the most out of your money saved. He walks through the pros and cons of first pulling from your IRA versus a brokerage account, taking into consideration required distributions, tax rates and strategies, capital gains, Roth conversions, tax gain harvesting, and charitable giving.
Questions answered:
What are the tax implications of giving to family members versus charities?
How should capital gains affect my withdrawal and tax strategy?
Timestamps:
0:00 - Mark’s question
3:12 - Pros of pulling from IRA
7:24 - Lower tax rate today
9:27 - Cons of pulling from IRA first
11:38 - Charitable giving
13:58 - Pros of brokerage pulls
18:40 - Other potential pros
21:39 - Cons of pulling from brokerage
26:03 - Things to consider
30:50 - Wrapping up
Create Your Custom Strategy ⬇️
Previous Episode
The Four Phases of Retirement with Dr. Riley Moynes
Dr. Riley Moynes, author and creator of a popular TED Talk joins James to discuss his own retirement which led him to become the author of The 4 Phases of Retirement. While Dr. Moynes was financially prepared for retirement, he wasn’t prepared for the boredom and depression that followed the first two years of retirement fun. As it turns out, his retirement path was far from unusual.
Dr. Moynes shares what leads to a truly meaningful retirement and how you can prepare now for a meaningful, deeply satisfying retirement, one that is about much more than vacations and golf.
Connect with Dr. Riley Moynes:
Website: https://thefourphases.com/
YouTube Channel: https://www.youtube.com/@rileymoynes545
TedX Talk: https://youtu.be/DMHMOQ_054U?si=wr1B3lw5ysc05GPS
Book: https://thefourphases.com/buy-the-book/
The Workshop: https://thefourphases.com/book-a-workshop/
Questions Answered:
Why are some people unhappy in retirement, and is there a way to prevent that?
What are some reflective questions that can set me on the path to a satisfying retirement?
Timestamps:
0:00 - Dr. Riley Moynes and his research
4:55 - Phases 1&2 - vacation and boredom
9:57 - Phases 3&4 - trial and reinvention
12:45 - Ask the tough questions
16:06 - Skip Phase 2 and 3?
18:39 - Pre-retirement preparations
22:52 - Service to others
26:05 - Summary
Create Your Custom Strategy ⬇️
Next Episode
How to Estimate Your Tax Bill in Retirement (And How to Pay it)
David has a question about taxes in retirement: When you’re retired and no longer getting a regular paycheck from which your employer withheld tax payments on your behalf, how do you estimate the taxes you’ll owe?
To answer this question, it’s important to understand where income in retirement will be coming from and how that income is taxed. Once you have an idea of what you’ll owe, you need to make estimated tax payments throughout the year.
James explains how Social Security, withdrawals from pre-tax accounts, pensions, and brokerage accounts are taxed, and he explains how and when to make estimated tax payments to the IRS.
Questions answered:
What is the Safe Harbor Rule and how is it relevant to estimated taxes?
Is all income in retirement taxed the same?
Timestamps:
0:00 - David’s question
2:09 - Estimated tax payment options
5:28 - Back to David’s question
7:48 - Types of income – SS
11:02 - Pre-tax retirement accounts
13:53 - Average vs marginal tax rate
15:50 - Pensions
17:26 - Brokerage accounts
21:20 - How to make estimated tax payments
23:23 - Other considerations
Create Your Custom Strategy ⬇️
Ready For Retirement - Retirement Income Strategies: IRA vs. Brokerage Withdrawals (The Tax-Smart Choice for Retirees)
Transcript
Let's imagine you just retired . First of all , congratulations . But secondly , how are you going to begin drawing down your nest egg ? Let's further assume that part of your nest egg is a brokerage account Maybe there's some stock with large unrealized gains and the other part of your portfolio is your traditional IRA or your 401k . How on earth are you supposed to decide what yo
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