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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

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Retirement income withdrawals

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: When taking money out of my accounts for income in retirement, is it better to spend after-tax accounts and save IRAs until later?

A: The conventional financial planning wisdom is that it is best to spend after-tax accounts first, then IRAs and then Roth IRAs. Part of the reason behind this logic is that Roth IRAs are the best type of asset to inherit, from the beneficiary's point of view, because it can provide a lifetime of tax-free income. Most people wind up passing on a large part of their account balances to their beneficiaries, so it often makes sense to think ahead to look at the strategy that gives the best results over two generations.


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