For many retirees there is a “sweet spot” generally between the age when they retire and the age when they must take required minimum distributions. This can be when their income taxes are at their lowest, providing an opportunity to move tax-deferred retirement assets into a tax-free retirement account.
When investors retire, I generally recommend spending after-tax brokerage account savings first, as the tax due on distributions should only be capital gains, which generally have some of the lowest tax rates. Next, I recommend using tax-deferred savings, such as a 401(k) or Traditional IRA, and lastly, any Roth IRA savings. The goal is to let tax-free savings grow for as long as possible.
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