Don't Use the Wrong Accounts First in Retirement!
Рет қаралды 15,433
Күн бұрынIt’s crucial to understand where to withdraw funds from first in retirement once you start relying on your investments for your monthly paycheck.
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Timestamps
0:00 - Using the wrong accounts first
0:56 - Start with your income sources
3:06 - Different types of accounts
4:37 - A baseline strategy for withdrawals
7:08 - Taking it to the next level
9:45 - Putting it all together
10:52 - Exceptions and tax considerations
11:58 - Do you want to keep more money?
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-- About Patrick King CFP® --
Patrick King is a fee-only financial advisor in Atlanta and the Founder of Prana Wealth. Over his career, Patrick has helped CEOs, all-star athletes, Grammy-winning artists, and many others build their wealth, retire sooner, and create a legacy. Patrick enjoys yoga, mountain biking, golf, travel photography, and Clemson football.
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@bukki07 8 ай бұрын
I’d be retiring/working much less in 5 years and curious to know best how people split their pay, how much of it goes into savings, spendings or investments? I earn around $150k per year, but nothing to show for it yet.
@Castro-worldbravest 8 ай бұрын
you should consider financial planning, never can tell what the future holds
@M.Morgan 8 ай бұрын
Money advice is subjective, what works for you may not work for me, but it's always better to plan. I'm quite lucky exposed to personal finance at an early age, started job 19, bought first home 28, got laid-off work 36 amid covid-outbreak, and at once I consulted a financial planner to handle growing my finance. As of today, I'm only 25% short of my $1m goal after subsequent investments.
@Skye-xl5lx 8 ай бұрын
@@M.Morgan bravo! i'm 34, inherited money from a childless relative, traveled overseas and got married to a girl almost my age, only issue is how to preserve and grow my reserve in this shaky economy, could you be kind enough with your advisor info pls?
@M.Morgan 8 ай бұрын
Can't reveal much, the advisor that guides me is 'Katherine Nance Dietz' a renowned figure in her industry with over two decades of experience. I'd suggest researching her further on the internet, she has a noticeable profile.
@LupeBaptista 8 ай бұрын
@@M.Morgan thank you for putting this out, just copied and pasted her full name on my browser, spotted her site easily and was able to send my message across, she seems impeccable..
@rickbackous1041 8 ай бұрын
Waiting until 70 increases your retirement success rate to 99%. Of course, it does. You're only going to live like 2 more years. I used to be subscribed to this channel and watched it pretty religiously, but I found I don't really agree with anything said. I unsubscribed a long time ago but for some reason he popped up again. My strategy. Take SS as soon as possible. You can't leave your SS check to your kids. Annuities next. if you have them. The longer you take them the better chance you have of winning that game. Taxable IRA next. To keep your RMD from getting out of hand when you turn 72. Individual account next because you can balance out gains and losses and adjust what you take accordingly to reduce taxes. Roth last if you need any money to balance the year out, again to reduce taxes. That's just me.
@situated4 8 ай бұрын
Thanks. This is helpful.
@sergiosantana4658 8 ай бұрын
$5400(social security)+$1000.00(pension)=6.400 monthly x12 months =$76.800 Annually with a 0% fed tax ,not the 20% mentioned@2:28
@micheleyoungblood 8 ай бұрын
How do you get a 0% federal tax on $76,800?
@sergiosantana4658 8 ай бұрын
@@micheleyoungblood Because only $6400 of social security is subject to taxation . So if you add the 12k of pension with the $6400 of social security for a total of $18400 of taxable income ,which will offset by the 27k of standard deduction. Hence a 0% tax bill
@chrisnettell2548 8 ай бұрын
With the amount of money this example shows, I don't think they would be paying 20% tax.
@sergiosantana4658 8 ай бұрын
100% If you are bringing in $6400 monthly from which $5400 is social security you will have a 0% fed tax bill , (mfj)
@Marl-hj8hh 8 ай бұрын
Love this. Thank you.
@DavidMercen-bv6ls 5 ай бұрын
Excellent videos. Great job and great explanations. Superb.
@cato451 8 ай бұрын
Need to find a balance between all accounts.
@dancarroll927 8 ай бұрын
How in the world does $8000 per month result in a 20% effective tax rate?
@livingontheedge8680 8 ай бұрын
Burning a $50k brokerage account before a $900k tax deferred account DOES NOT net them $500k+ over their retirement.
@daw7773 8 ай бұрын
It depends on the rate of return and dividends earned on the 401/403B accounts. Retire at 65 use 5 yrs of brokerage accounts, social security and pension amount. Delay withdrawing 401/403 until 70 and the $900,000 accounts gain average 8% per year compounded with dividends. Assuming dividends 2-3% added each year compounded/reinvest dividends. The 401/403 accounts could earn over $500,000 by age 70.
@livingontheedge8680 8 ай бұрын
@@daw7773 In the example given, the brokerage account had a total balance of $50k, essentialy 1 year of funds before exhaustion of said brokerage account.
@DY-Hak1 8 ай бұрын
It all depends. When we pass, our investment accounts will get a step up basis when our kids inherit them. So if our goal is to pass our investment accounts to our kids, it's probably best to use the traditional IRA first.
@micheleyoungblood 8 ай бұрын
IRAs don't get a step up basis. The brokerage account will get a step up basis
@jessefletcher9116 8 ай бұрын
on the taxable investments I understand that there's a way to avoid cap gains tax altogether, for MFJ in 2023 if taxable income is below $89,250 then cap gains are taxed at 0%.
@everydayadventure66 5 ай бұрын
What about early retirees and the consideration of health insurance subsidies? Does that change the sequence of withdrawal strategy?
@davidcummings5711 8 ай бұрын
Too confusing to follow. Need some graphs, charts, or other visuals. As it is this is just a verbal mishmash. 😕
@situated4 8 ай бұрын
The whole system is rigged to be as confusing as possible to benefit accountants, tax preparers, politicians and tax attorneys. It's absolutely ridiculous and depressing.
@rocqitmon 7 ай бұрын
I rewound four times because I'm used to the typical vlogs that give chart analysis. If you're talking real estate or other investing, it's less complex. Tax decisions based on multiple income streams needs charts or spreadsheets.
@resterAnonyme 8 ай бұрын
Does paying taxes from an IRA before age 59 1/2 during a Roth Conversion cause the 10% penalty as opposed to paying the taxes from a different source?
@Wayneman50 8 ай бұрын
What if you have no heirs?
@sharky6128 8 ай бұрын
IT WOULD HAVE BEEN MORE HELPFULL TO LIST THE SEQUENCE OF ACCOUNT WITHDRAWALS AND THE SUCCESS PERCENTAGES SO THAT YOU COULD VISUALLY COMPARE THEM AT THE END. 🤔
The Retirement Nerds
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