This is gold. Im 15 years away from early retirement at 50, and I think about this a lot. Lowering my tax bill, making my money last, and what kind of inheritance for my kids. If you start with the end goal in mind you can figure out the best way to build that goal. Which accounts to invest in and so on.

Thanks Dustin great advice love the nest egg charts.

Love the name references. Thanks for the fin tips!

Don't forget people, when you turn 70 1/2 you can do Qualified Charitable Distributions out of your IRA to your favorite charity and pay no taxes up to 100k in IRA distributions. Nice little planning tool that not too many people really know about.

Wow....this is some great information. Thanks

Great video, and I also would like to see something similar to what akshayg suggested with using tax deferred before Roth, to reduce the amount of money subject to RMDs. As someone approaching early retirement in my 50s, I am leaning towards the approach of using taxable (until age 59.5), tax-deferred, and tax free savings in that order. I also am planning to do some Roth conversions in early retirement, when income/tax rates are lowest, before taking Social Security.

That was very interesting. I would suggest doing another video analyzing someone targeting FIRE (financial independence retiring earlier) for example someone stopping working at 50 or 55 and then formally retirement ASAP (62 years old?). Thank you!

Great to see this modeled out as I was thinking about this recently as I'll be retiring in about 2 years. I'll surely use a tool like to be most efficient on withdraw strategy. Thanks

Great video, thank you. I would like to see the same scenario but take all from the tax differed account first, then taxable and finally the Roth. This may take advantage of the lower capital gains tax on the taxable account as opposed to the regular tax rate from the differed account. I also think that this will protect the ROTH for the 'widow' .

Very good information.....I think we should see more of your nest egg software in future videos!

For those that have reached the age where RMDs are required and the RMDs plus Social Security/Pensions are more than you need for living expenses, there is no longer any withdrawal strategies. It is simply how do you best tax manage your taxable money. For example, use municipal bond funds.

Haha. I follow Heritage Wealth as well. Good stuff from both you guys

I try to do these sort of projections using a spreadsheet. It helps a lot in trying to plan out investment strategies for the future and which account to focus on.

Nice Read more

Great video and super timely for me because I’m retiring now. What would be interesting to me is if you were to model a scenario where I am converting a traditional IRA to Roth and paying my taxes out of taxable investments and how best to spend in that scenario over the next 10 years. So the scenario is a little bit more complicated than what you described because it adds in the taxable withdraws from the traditional IRA that are used to convert to Roth IRA‘s. Any thoughts on that?

Younger folks should focus on investing in real estate. Cash flowing properties will allow you to achieve financial freedom far earlier and you won't have to wait til your 60s to retire. Cash flowing rental properties will provide cash flow in perpetuity and you don't have to worry about your withdrawal rate of a retirement account to make sure you don't run out of money!

Where in Florida? Come to FL seversl times per year. Thanks for video

Great video. Here's an idea for you. Similar starting situation to Louie and Lucille. In this case Louie has been at the investment thing for a while now with company X and has a sizeable amount in the 401k. Let's say he's targeting the $2M range for this thing by the time he hits 55 or so and would like to consider retiring early. Here's the thing - Louie has not been working with a financial advisor and due to this, has not been focusing on the after tax accounts yet. Show how Louie can really improve his chances in retirement (and potential early retirement) by getting the after tax accounts built up quickly. Show the tax benefits to this strategy.. Could be applicable to many people in the corporate world who simply haven't taken the time to go down this path.. Great videos by the way. Love the channel.

I’d be interested in seeing savings for a goal 5 years away modeled in the current environment. Wouldn’t want to take a ton of risk with something like that if it’s a house down payment or something. However, money market accounts are almost worthless right now paying well under 1%. If we wanted to put some $ into both 1) A zero risk Internet savings account paying

Showing if you take more than 4% on the front end..retiring 62, with no SS. .then turn back the dial when you take SS at 67 or 70? How that models...

Great video! Thanks Dustin! Josh is a great idea man - Cool you both use the same software.

As I am a new investor and investing heavy instead of leaving in a checking account not growing, I was wondering how my husband and I would withdraw in 20 years lol thanks!

Hi Dustin, This is really good. thanks. some ideas on modeling, take ROTH last, deplete tax deferred first from legacy pov. someone needs to pay taxes on tax deferred account, why not deplete that first. risk profile will change(I never want to go below 50% stock, unless real interest rate is high) as we near the retirement, how to model that. taking advantage of golden years where you stop working but RMD, SS has yet not started, use these years to move $$ from tax deferred to taxable? give younger(relatively) customers some knowledge on how estimates for medical and social security are calculated. show us in software how an individual can fall in higher tax bracket in retirement. how to avoid and optimize it.

I've always wanted to see models showing sequence of return risk. Dave Ramsey always says go 100% in mutual funds. Most advisors say some in equities and some in bonds due to the amount you have to live on in the bad years would eat up to much of the nest egg if it's all equities. I'd like to think the most aggressive approach probably works for some people, but I'd like to see it.

It's better to keep making retirement money than drawing it down.

Josh is the best! Thank you for mention him!

Great examples. Is there a program online where I can plug in MY number$ to see what's best for me and my wife? Will it take pensions into consideration? And OASDI?

Deplete the Tax Deferred first, Deplete the Taxable Second. But also locate you allocations is the most tax efficient bucket. You got to get those RMD in check or they will blow you whole tax plan. Use a little Roth to keep from busting through a tax bracket. Getting close to 59.5. I'm starting to pay closer attention to managing these pots.

My thought process is retire 50-55, taxable brokerage account to get to 59.5, only take out under 80k to stay in the zero capital gain tax rate. Then use up 401k so I dont have rmds to deal with. This would give my roth ira even more time to grow tax free, possibly another 15-20 years to compound. Each account will be roughly the same value before retirement. Thoughts?

What about doing a video for a single person, retiring in late 50s, but maybe withdraw from tax deferred accounts first (to reduce the account balance before RMD kicks in)? Is it worth it to withdraw from tax deferred account plus convert some money to Roth account systematically between late 50s to age 70, then start taking SS at age 70? You pay some extra tax for the conversion, but then get less of the SS benefit taxed later. Assume needing $55K per year for expenses (including income tax and insurance premium), total $400K in Roth, $700K in IRA/401K, $400K in taxable account. Primary home is not included in this, assume paid off.

Amazing how some people need $90,000 in retirement. I'm a very active person I love to travel, I can live very comfortably on 40,000. Too many people probably still have a mortgage

I'd be interested to see a breakdown of how to invest for returns. I.e. Stocks, Bonds, REITs, etc... my parents are only going to need about 3.5% of their current 401K a year, so would they be best to use a dividend fund/REIT mix vs bond? I'd be interested to see the different asset allocations modeled in retirement!

How about living off your 401k to delay ss to get as much as possible. Still have a little left in 401 2 nd bucket. What to do what to do. Thanks dig your stuff.

More of this.....

supposed the 3 buckets invested in same way and gets same return - I'd go with deferred bucket first to withdraw, since this bucket is mostly with more $, try to minimize the RMD tax later. the taxable definitely gives you more flexibility than deferred (long term capital gain tax rate is one of them). the tax free bucket becomes a super "emergency" account because whatever you draw from Roth, no tax at all. so I don't follow the logic of Taxable 1st, Taxfree 2nd and Tax deferred last.

Okay, my suggestion is to model someone who never had a 401k. So, by retirement, they had successfully done a Roth conversion for all of their personal IRA. They wanted to retire early. They have most of their money in a Brokerage account because they were unaware of tax-advantaged accounts until later. They have a similar amount as Loui but half is in Brokerage half is in Roth and another 70,000 in an HSA. Their target retirement is 58. Their target income is 80,000.

It seems as though a retired couple has an investment portfolio that is stagnant. And the retiree is no longer buying and selling. That is not true: You are adjusting your holdings every 6 or 12 months according to your "risk tolerance." Selling equities and buying fixed income securities. RMDs go from tax deferred accounts to taxable accounts. Now you are selling and buying. Too much cash? $100k in a bank saving account will get you 1% interest. You may choose to trade cash for fixed income securities. Now you are a buyer.

Hm... I would think you would want to start taking tax deferred distributions as soon as you are eligible in order to stretch it out and pay less tax on it vs taking it out over fewer years in a higher tax bracket. That 10-12% tax bracket looks mighty good to me. Leave Roth for last for estate planning reasons.

This was fascinating. I've been thinking about this for a few years and I'm only 31 but I'm more financially conscious than some. Wouldn't you need less money if you have 0 debt?

Withdrawing from the Roth first seems counterintuitive since that money has so much potential later in life. The whole reason I am doing a Roth conversion while I'm in my early 60's and retired is to have that grow for the next 15 years and never worry about RMD's or taxes on it.

I’m 74, my wife will be 62 in July. I started drawing Social Security retirement benefits at 62 but kept working part time until age 72. Fully retired now. My wife still works full time but she is considering retirement within the next 18 to 20 months. Her main concern is how to obtain health insurance until she becomes eligible for Medicare. So if she continues with same employer through December 2023 she could retire and then COBRA for 18 months until she becomes Medicare eligible on July 1, 2025. We need help with determining the optimal withdrawal strategy from our various retirement accounts. Is there a version of this planning software you demonstrated in this video available to non-financial professionals like me? It looks very comprehensive and powerful so I’m thinking it is expensive and perhaps limited only to financial advisors.

what does something like this cost a person

What happens if i retire when i reach my age and i want to withdraw my profit sharing without tax because what i listening what many guy talk just measion ritire early and 401k only never talk about profit sharing contributions can you help me for this plan to withdraw my cash value .

Why not withdraw from tax deferred first to pay lower taxes a few years and eliminate chances of high RMD's?. Then in few years start pension and other income sources available like dividends in taxable accounts and Roth and whatever dividends left in tax deferred, HSA, or annuity.

Thank you LOL HOW about retiring in 6 months

I suggest using tax deferred as soon as possible (being careful not to boost your current tax rate) and keeping tax free as long as possible. So 1) tax deferred to a tax bracket limit, 2) taxable while you can, 3) tax free if you must. Don't want those tax deferred RMDs making you pay more taxes (or burdening your spouse should you pass first). At least for now tax free passes tax free, taxable passes with a step up in basis, but tax deferred now has to be used (and taxes paid) much more quickly for every heir that is not your spouse. I'd even consider if there is room in the tax bracket beyond what is needed for spending, maybe taking extra from the tax deferred and do "roth conversion" to create more tax free later. (Watch the 5yr clocks!)

Individual goals and SS affects these strategies a lot. The way you are showing the tool on YT, its pretty hard to read those numbers, graphs are easier. This subject needs more attention. real scenarios are the best, not generalities.

What I would like to see is if Husband retires at 58 (Nov 2032) and the wife retiring at 53 (May 2033). What would Louie Armstrong do?

For a younger person, wouldn't it make sense to take the tax hit now and roll over the 401k to a back door ira where you decide to bite the bullet and pay the lump sum of money in taxes now as the 401k was in a traditional account, not Roth? Once the taxes are paid then everything is in the Roth IRA and compounding tax-free for many years ahead and won't have to worry about which accounts to draw from in retirement as it will all be tax-free. It will also provide a lot more investment options that are in your control compared to traditional company 401k investment options. In the IRA's we would be able to put our money into stocks, bonds, ETFs of our choosing and not a limited selection of mutual funds offered by a company that often times have maintenance fees and expense ratios that are unnecessarily high. Plus, it is safe to say that in the next 25-30 years its almost 100% guarantee that tax rates will be much higher, so why even try to find the best ratio of pulling money from pre-tax and post-tax accounts when you can have it all in your control if you just bite the bullet and pay some taxes now? All those gains then won't be taxed.

Are you a CFP?

Is there any software available to non financial advisors we can use ?

Hi, love your channel. How about modeling, single age 64, retired, on SS, starting a pension of $400/month at 65, with Ira bal of $820k, Roth bal of$120k and brokerage bal if $1.34m. Needing total of $60,000/yr. thank you.

Where can I go to get the Nest Egg software?

Can you model if someone in their 20s putting away $20,000 a year and wants retires at age 45 want to withdrawal $45,000 a year.

well if they keep tax deferred account last to withdraw from, they will pay less tax while they are living, but who ever gets that money after them would have to pay it in one go(one year). tax deferred in true sense here, deferred to kids. there is no basis to adjust in tax deferred accounts. so no step-up basis.

What is qualifications for Financial Advisor?

thanks for referring to Josh :)

I'd like to see some modeling that also takes into account the inheritance my grown kids will receive when the inevitable happens, since inheritance affects taxable/Roth/traditional in different ways.

4%

I follow Heritage Wealth but Josh is so difficult to watch, it's as if he has attention deficit disorder, his video's are all over the place. Content is great but presentation has so much to be desired. Your content is good and presentation is good.

I turned the volume off as soon as he started being mysoganistic.

if you need gun info I can help with that. All questions are welcomed.

Pretty sexist comment regarding men not asking questions. More accurately it is a factor of ignorance. The less intelligent types are afraid to ask questions.