The order in which you withdraw your funds during retirement can greatly impact the taxes you owe and the longevity of your savings. In this video, we’ll explore a unique approach to taking withdrawals, which is often overlooked. If you’re considering retirement or have recently retired, watching this video will provide valuable insights to help you make the most of your savings.
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⚠️I am not an attorney, SSDI advocate, or affiliated with the Social Security Administration or any other entity of the US Federal Government . I am a practicing financial planner, but I’m not YOUR financial planner and since I don’t really know you, I can’t give you advice. So please don’t take this video as specific advice for your specific situation. Consult your own tax, legal and financial advisors. 🙇🙇🙇🙇🙇
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As we approach retirement, one of the most important decisions we will make is deciding how much to withdraw from our retirement accounts each year. This decision is critical as it directly affects our standard of living during our retirement years and could have significant implications on whether our retirement savings can sustain us for our golden years.
The optimal retirement withdrawal strategy varies depending on your unique situation and financial goals. However, there are a few general guidelines that can help guide your decision-making process.
One of the first things you need to consider is your overall financial situation which includes the size of your retirement savings, your other sources of income, and your projected expenses during retirement. It’s important to evaluate these factors to help determine the amount of money you need to withdraw annually to maintain your desired standard of living.
Assuming you have a comfortable retirement savings, withdrawing a percentage of the portfolio each year can be a good way to maintain your lifestyle without overspending and running out of funds too soon. The 4% rule is a popular guideline that suggests withdrawing 4% of your retirement account balance in your first year of retirement, adjusting it annually for inflation to maintain your purchasing power.
Another strategy is to use the “bucket” approach. This involves dividing your retirement savings into different “buckets” based on when you’ll need the money. For instance, you have a cash bucket for expenses during the first few years of retirement, a bond bucket for money you’ll need within the next 10 years, and a stock bucket for money you won’t need for a decade or so. This approach aims to reduce the risk of overspending by ensuring that you have enough cash and short-term investments to cover your near-term expenses while your long-term investments continue to grow.
It’s also important to consider taxes when creating a retirement withdrawal strategy. If you’ve invested in both pre-tax and after-tax accounts, you’ll want to consider which accounts to withdraw from first to minimize taxes. That said, speaking to a financial advisor can be helpful to optimize retirement tax planning.
Lastly, be flexible with your retirement withdrawal strategy. Life circumstances can change, so it’s important to adjust your withdrawal rates and plans accordingly to ensure that your retirement funds last as long as possible.
In conclusion, having a solid retirement withdrawal strategy is critical to ensuring that you achieve your financial goals during your golden years. It’s essential to evaluate your situation and seek professional advice to determine the best plan of action. Remember that it’s crucial to be flexible, so adjust your strategy as needed to ensure that you’re on track to live the retirement you deserve.
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"conventional wisdom" is rather a "designed" path to herd the population on.
This conventional wisdom is scripted in the "software", and whatever it spits out, the population receives it with full faith like word of God.
There's so much deception & treachery in the world as we "modernize" our lives..
Finally Got Around To Viewing Video. Trying To Envision How The Alternate Could Benefit Me. Over The Last 3 Years (My Retirement) I Have An Effective Tax Rate 6-7%. Because Of My Low Effective Tax Rate (And After Ridding Myself Of The Headache Trying To Understand Concept), I Just Don't See Benefit In My Situation. I Currently Use My SS And IRA Dividends (Monthly And Quarterly) To Fund My Budget. I Make A Withdrawal At End Of Each Year To Help With Budget For New Year, And Also To (Hopefully) Put Extra Into Savings/Cash (And To Pay Least Amount Of Taxes On IRA Distributions). The Large End-Of-Year Withdrawal Is Determined By My Probable Tax Bill-I Try Different Amounts With The Goal Of Protecting Taxable Amount On My SS As Much As Possible. So Far, Be It By Luck Or Actually A Legitimate Plan, I Have Been Happy With Results.
Time value of money?
VThe video link explains the odds of getting approved for social security disability under the age of 40 is very hard to get approved and even harder to stay on disability once approved by the social security administration approval board! Now saying that my disability is very unique situation do to my disability lol! Below is my thoughts and prayers i have! Hope this explains and everyone understands how our lives was dramatically changed by just one event and we survived by the grace of GOD and all gods children that was sent to assist us and continue to send to us as needed! Thank god and thank you all for everything you do no matter how small it is it helps! My life is a great example of your preying for us and it shows god is listening to those prayers! Be thankful and grateful for everything and everyone around you and everyone's life journey is unique and are examples to others rather good or bad the examples they are to others! Have a great day and be safe!
I was 38 years old when i was approve for my social security disability benefits do to my injuries of no eyesight and dramatic brain injury the social security representative told us the odds of reviewing my eligibility is very slim! I will remain on disability until i turn 67 years old which i be swapped over to my social security retirement benefits. That means i will be on social security disability benefits for 29 years and if i live to my average family lifetime of age 88 years old i would been claiming social security benefits for 50 years if i live that long. It is crazy to think about a individual living on social security for over 30 years and insane to think of a individual claiming benefits over 50 years. It is remarkable i am alive after the home invasion that ended my career and took my eyesight and this the result of that event. Living in total darkness and everything and everyone is invisible to me until I touch or hear something. I am thankful and grateful i am alive and i can still perform task like electrical, mechanical, welding, woodworking, and use technology and tools that have been developed for me to preform those tasks. I continue to prey and hope the bionic eye is finally ready and i can get the funds to do the medical treatment to receive the bionic eye! I also pray the robotic guide dog is finally finished and released to the blind community and i have the funds to get one if i do not get the bionic eye before the robotic guide dog is available! In this I pray Amen! Be safe and enjoy the little things in life! 0:39
I tried to get get devin and his team to look at mine. Filled out the form and was told i did not qualify for their services, although I would be getting three streams of income from retirement. I felt discriminated against. I guess they only want to deal with people whom have very large amounts of money coming in. Disappointing
My taxable account has divided paying stocks. I will live off dividends and never sell shares.
I don’t believe the buckets are fully correct especially if one has quite a bit of tax deferred monies such as the example given.
1 million tax deferred
400k taxable with 50k capital gain.
One can pull in 83k of taxable income or so and not pay any capital gain. MFJ
The tax infested account has to be reduced as much as possible between retirement and prior to taking SS or else SS may be taxed too. And RMD will come into play also.
They need 7k per month to live on which seems a bit high.
Currently, there is standard deduction of 27k or so. Free money.
RMD for a 500k tax deferred balance is 18.9k. Well below standard deduction.
A better portfolio would be as follows at the time of retirement and ideal age around 62-63:
1. Tax deferred 800k
2. HSA 50-100k
3. Taxable or after tax 300k
4. Roth 100k
Perform some Roth conversions between 62-67. Take SS 67 if souse get half.
Stay in 12% bracket or less.
This analysis appears to ignore the time value of money (delaying payment of taxes to pay with cheaper dollars)
I dont understand the 12%. how is that figured out?
I guess of some limited importance is that dividend income from Taxable (mix of stocks,bonds,cash,whatever perhaps mostly as mutual funds) can be partly of "qualified dividends" depending on your own mix and allocation,the qualified dividends aren't taxed quite as hard as withdrawals taken from "tax deferred" IRA or 401/457–
— aren't all of the dividends that flow into your tax deferred eventually subject to the full non-qualified taxation?
not to recommend either dividend avoidance or dividend seeking (as in broad market or "total" stock mutual funds might be considered "dividend neutral")
perhaps both dividend avoidance and dividend favoring investment strategies decrease diversification and increase risk?
(although I would tend to favor dividend favoring if forced to make the choice)
In other words, still withdraw taxable dollars first but at the same time convert the most pre-tax dollars to Roth until you fill up the lower tax brackets. Then withdraw pre-tax dollars (if any left), and then Roth dollars. Correct? Doesn't this software have the capability to project the results of this strategy as well?
Wow, they got a lot
Minimum Requirement Withdrawals. Put it an CD
Were RMD's factored in? I expected to see a bump in taxes at age 72 for that couple.
What about us single unmarried folks who don't have these large sums …. talk about that
Psychologically I want to save the best for last (not touch the Roth IRA for as long as practical)regardless of logical or accounting considerations
The bulk of my working years were before the Roth IRA became available and also the 401/457 type accounts became available to me later on,the Roth version of those only was being introduced as I was about to retire. I would have (and would have been better off having done so) more Roth and less tax bomb had it been available the whole time.
Did some limited Roth conversion activity but that has been somewhat curtailed because I feel the need to have a lot of cash for a coveted home purchase that hasn't been able to happen because of family obligations. But I have been lucky to have a pension so I guess that more than compensates for the lack of Roth.
I understand that as of now,Roth 401 and 457 accounts are now free of Required Distributions during the lifetime of the original owner(s)?
You might connect better if you used examples with figures more in line with average Americans.
Unclear if time value of money was taken into account in this analysis. When the presenter says, "Your tax savings over a lifetime are X," it appears he may have been adding 2023 dollars , 2024 dollars, 2025 dollars, … , 2052 dollars together as if they were all the same thing. If so, that makes the ending difference look substantially larger than it really is in today's dollars.
Good information but this is basic withdrawal strategy, it's scary to think any professional would think differently
No I'm just going to have my 401k Roth from work,my IRA Roth from my bank and my CD and my savings account.
Very disappointing you never talk about single unmarried people.
Typically within a few hours of Devin posting a video there are hundreds of comments….. most of them complaining about their
SS benefit being inadequate, the govt stealing their SS, having to pay taxes on SS, etc etc etc. When Devin posts a video that has do with a higher level of financial planning beyond the age to start benefits, the number of posts is minimal. This reinforces to me that the vast majority of the US population has little or no knowledge of retirement benefit planning, and most of them sadly are going to have to depend almost entirely on SS.
Wow