Root Talks: How Should I Split Retirement Withdrawals Between Pretax and Roth Accounts?

Ready For Retirement

James Conole, CFP®

Investment Planning, Bonds, Education, Stocks, Cash, Business, Dividend Investing, Retirement Planning, Retirement, Investing, Tax Planning

5 • 706 Ratings

🗓️ 13 February 2025

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, we're talking about the importance of a strategic withdrawal plan in retirement to keep taxes in check and set you up for long-term financial stability. Ari and I break down why a simple 50/50 split between traditional and Roth accounts isn't enough—you need to plan based on your tax situation and future needs. Using a listener's example, we walk you through how to think about tax brackets, required minimum distributions (RMDs), and when it might make sense to convert funds t...

Transcript

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0:00.0	Hey, James. So there's this really cool phrase called withdrawal strategy, but it sounds complicated.
0:05.9	I think someone made it up so as advisors get to feel like we're super smart.
0:10.2	But what it basically is, is how do we create income in retirement?
0:13.9	When you're working, it's pretty simple. You have your job that allows you to live off of that income.
0:19.0	In retirement, it's a little different because most people have multiple accounts.
0:22.8	There's a 401k.
0:24.0	There's an HSA.
0:25.2	There's a Roth IRA.
0:26.3	There's a brokerage account, which we call the superhero.
0:28.9	There's all these different accounts.
0:30.4	So it's not that simple.
0:32.3	Withdrawal strategy is what we're going to be talking about today.
0:37.1	This is another episode of Ready for Retirement.
0:39.7	I'm your host, James Cannell, and I'm here to teach you how to get the most of the life with your money.
0:43.9	And now, on to the episode.
0:47.6	Let's do it.
0:48.8	This is one of those places, one of those things that can be quite overwhelming if you don't have the proper framework of how do you think about this when you retire? And so we'll give that framework,
0:57.7	give some thoughts on that. But where do you want to start with this? Because there's a few things
1:01.6	we can talk about. Yeah, let's start about what prompted this. Like, why are we deciding to talk about
1:06.7	this? Well, this was from a comment that was left on our YouTube channel, which is how we decide
1:11.2	to talk about any topic. So if you're listening to this, going, I haven't heard you guys talk
1:15.3	about inheritance or haven't heard you talk about RMDs. Well, we talk about those a lot.
	...

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