How do I use Cash Flow Planning in Retirement?

“Now that I’m retiring, where is the best place to pull money from?”

IT DEPENDS!

Let’s say you find yourself in a lower tax bracket after retirement because you are delaying Social Security benefits and you aren’t yet required to take distributions.

Conventional wisdom says to spend taxable money first, then tax-deferred, then tax-free. The idea is that the more tax advantaged the account, the longer you should let it accumulate.

BUT

What if your future Required Minimum Distribution (RMD) will be greater than the money you need to fund your lifestyle? Couldn’t those low income years be an opportunity to pay lower tax rates on these dollars which will be taxed eventually?

OR

What if you have an individual stock position in a taxable account with a large gain? Would you not be better off using use those low tax rates to diversify your investments?

Think of your money as your plane, the vehicle to get you where you want to go.  You’re the pilot.  Rather & Kittrell is here to help navigate as co-pilot through the complexities in your journey.