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Tax Planning

Tax Strategies for Spending Down Your Accounts

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October 31, 2017

Oct 31, 2017

11:09 AM America/Chicago

Some annoyances in life seem impossible to avoid each year – mosquitos in the summer, holiday shopping in the fall and winter and tax filing in the spring. While it may be difficult to avoid some of these unpleasantries, there are strategies investors can employ to reduce the effect of portfolio withdrawals on taxes.

A common tax question posed by retirees is, "If I have a traditional IRA, a Roth IRA and multiple taxable accounts, how should I withdraw money to fund my retirement?" The reason this question plagues taxpayers so consistently is because ideally they would give it serious thought every year. While retirees could create a plan during the first year of retirement and never change it, as cash flow needs and sources of income change over time, so should their approach to withdrawing their funds.

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