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Where should you pull money from first in retirement? Here's the standard order all American retirees should consider

The article from MSN Money discusses the optimal strategy for withdrawing funds during retirement, known as the "retirement withdrawal order." It suggests that retirees should first tap into their taxable accounts, like savings or investment accounts, to benefit from lower capital gains tax rates. Next, they should consider withdrawing from tax-deferred accounts such as traditional IRAs or 401(k)s, where withdrawals are taxed as ordinary income. The rationale is to delay taking money from these accounts to allow for further tax-deferred growth. Lastly, funds should be withdrawn from tax-free accounts like Roth IRAs, which offer tax-free growth and withdrawals, ideally preserving these for as long as possible to maximize tax benefits. This order helps in managing tax liabilities efficiently over the retirement years, ensuring that the retiree's savings last longer while minimizing tax burdens.

Read the Full Moneywise Article at:
[ https://www.msn.com/en-us/money/retirement/where-should-you-pull-money-from-first-in-retirement-here-s-the-standard-order-all-american-retirees-should-consider/ar-AA1ABd8x ]