How to Withdraw From Your Retirement Accounts in the Most Tax-Efficient Manner

Robert Powell, CFP®

When it comes to generating income in retirement from your various accounts, conventional wisdom would have you withdraw money from your taxable accounts first, then your tax- deferred accounts and, finally, your Roth account.

And, there's some logic to this approach, says Roger Young, a senior financial planner and vice president with T. Rowe Price Associates. "If you draw from taxable accounts first, your tax- advantaged accounts have more time to grow tax-deferred," he noted in a recent paper, Retirement Pulse: Tax-Efficient Withdrawal Strategies. "Leaving Roth assets until last provides potential tax-free income for your heirs. Plus, it is relatively easy to implement."

Choose a membership to read the full story.
Join TheStreet+ Today
Get the latest research, news and analysis to help you achieve your retirement goals.
  • Unlock Financial Strategies to Help Your Retirement Planning
  • Tips and Advice on Everything You Need to Know to Live Well in Retirement
  • Submit Your Most Pressing Retirement Questions to Top Retirement Expert, Bob Powell
  • Latest News in Social Security, Medicare and Retirement Planning
Already a Premium Member? Click Here to Log In

Learning Center