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About Choosing Which Account to Draw From First in Retirement (Save $$$)
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Your withdrawal order in retirement matters more than most people realize. Spend from the wrong account first and your portfolio can run out years soonerâand quietly hand thousands to the IRS along the way. The sequence you pull from your IRA, brokerage, and Roth is one of the most important, and most overlooked, decisions of your first year of retirement. In this Behind the Plan episode, Nick Hassig, a Lead Advisor at Root Financial, explains how to build a tax-efficient withdrawal sequence that helps your money last. The common mistake is defaulting to the IRA because that's where the balance sits, but every dollar is taxable as ordinary income, which can push you into a higher bracket, tax more of your Social Security, and raise your Medicare premiums later. Often it's smarter to draw from your brokerage first, blend accounts, or convert to Roth before RMDs begin. And because retirement spending follows a "smile" rather than a flat line, the right sequence has to adapt year to year. The biggest mistake isn't withdrawing money... it's assuming there's no strategy behind the order you withdraw it in. Get the sequence right and you can stretch your portfolio longer, lower your lifetime tax bill, and avoid costly surprises. Want to work with Nick? Start here â https://learn.rootfinancial.com/nickh-behindtheplan ======================= James' Channel â https://www.youtube.com/@RootFP Ari's Channel â https://www.youtube.com/channel/UC8pFXyHfzI9jTtRQDQpS3Hw Facebook: https://www.facebook.com/rootfinancialpartners/ Instagram: https://www.instagram.com/rootfinancialpartners/?hl=en LinkedIn: https://www.linkedin.com/company/root-financial-partners/ â±Timestamps:â± 0:00 The Shift From Saving to Spending in Retirement 0:44 Why the First Year of Retirement Matters 1:57 Why Retirement Spending Changes Over Time 2:20 Build a Flexible Retirement Income Strategy 2:59 The Goal of a Thoughtful Withdrawal Strategy -- Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation. The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal. Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
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