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The standard drill has always been (and seems to continue) to leave deferred accounts intact as long as possible, because of the ordinary taxes due on the withdrawal.

As I prepare to retire later this year, I am aware that a large segment of my assets are in deferred accounts, including 401-K, IRA and an annuity. Because of the simplicity of tax reporting, I have concentrated my equity investing in these accounts.

Now, I am attempting to set up a fixed income portfolio to provide some of the income I will need going forward. I am over 59 1/2 but under 70.

The question arises if, under today's tax rates, whether it is better to begin drawing from the deferred accounts, or continue to defer those investments and draw out of the free/taxable accounts. Of course, withdrawals from IRA's come out taxed at my 18% tax rate, without regard for whether the investment I may be liquidating could have been taxed at a lower capital gains rate if it had been in a taxable account. Under this scenario, I lose any benefit from capital losses.

I might also have to concentrate the fixed income investments (in municipals) in the these taxable accounts.

Can anyone give me their reasoning on how and why they would approach this?

Many thanks to anyone who can assist me in this decision
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