How to withdrawal down tax efficiently?

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mike2468
Posts: 72
Joined: Wed Jan 30, 2019 6:55 am

How to withdrawal down tax efficiently?

Post by mike2468 »

My wife and I are planning on retiring a little over a year from now. Can anyone recommend a tax professional, book or BH post with a withdrawal strategy? We follow the 3 fund index portfolio but I'm not sure what funds to keep in which accounts and which one to withdrawal from first. I want to keep my taxable income as low as possible to keep our ACA premiums low. Reason I ask is because we will be retiring before the age of 59 1/2 and have multiple accounts with fidelity that have different rules. For example my wife has 6 accounts with Fidelity:

Taxable
Traditional IRA
Roth IRA
Inherited IRA
HSA
Roth 401k

Your thoughts are appreciated.
Thanks,
Mike
mtwhmemn
Posts: 482
Joined: Tue Jul 03, 2018 12:07 pm
Location: NC

Re: How to withdrawal down tax efficiently?

Post by mtwhmemn »

In order for you to get good feedback on your question, you are going to need to provide your whole financial picture. There is a template on here somewhere here to follow.
Silk McCue
Posts: 8951
Joined: Thu Feb 25, 2016 6:11 pm

Re: How to withdrawal down tax efficiently?

Post by Silk McCue »

Asking Portfolio Questions.

viewtopic.php?t=6212

Cheers
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David Jay
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Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: How to withdrawal down tax efficiently?

Post by David Jay »

Silk McCue wrote: Tue Dec 07, 2021 4:35 pm Asking Portfolio Questions.

viewtopic.php?t=6212

Cheers
Mike:

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sycamore
Posts: 6359
Joined: Tue May 08, 2018 12:06 pm

Re: How to withdrawal down tax efficiently?

Post by sycamore »

OP, some previous BH threads discuss your topic in general terms:
- Constructing Tax Efficient Withdrawal Strategies for Retirees
- Tax Efficient Withdrawal Strategies - Call for Papers. This one references a Kitces blog post; he also has a more recent powerpoint.

And one article from Morningstar: Get a Tax-Smart Plan for In-Retirement Withdrawals.
KlangFool
Posts: 31525
Joined: Sat Oct 11, 2008 12:35 pm

Re: How to withdrawal down tax efficiently?

Post by KlangFool »

OP,

1) And, you need to include your annual expense.

2) You need to understand what is counted and not counted as MAGI for ACA subsidy calculation.

3) Keeping 2 to 3 years of expense as cash would separate your annual withdrawal from your actual expense needs.

4) In summary, you need to start accumulating cash now.

KlangFool
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