No. of Recommendations: 3
With substantial sums in 401k or other tax advantaged accounts, be aware of required minimum distributions (RMDs) beginning at age 70-1/2. Plan ahead to avoid the situation where the distributions must be taken when your lower tax brackets are covered by Social Security, pension, and other payments.

The best way is work down the balance in those advantaged accounts whenever you have a low tax year. Roth Conversions (or a series of partial Roth conversions) is one way if you don't need the funds. Or perhaps defer Social Security or other payments and live off of tax advantaged funds when you can. Plan ahead for best results.


=====================================

Yes, I suppose you can say that's "The best way", if you never have a lot of medical expenses in your final years - but a lot of people do. Including long-term care expenses, which become much more likely the older you get to be. In which case you can have enough deductible medical expenses to offset whatever you take out of an IRA, let alone the RMD.

Bill
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.