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This post is part of a series where retirement expert Dan Solin offers simple answers to the ten toughest retirement questions. See all 10.
Q: How should I proceed to withdraw funds I need in retirement?
A: Once you have retired and need to start tapping into your retirement savings, you have a number of options to consider.
You can take a periodic or lump sum check from your 401(k) or similar plan. Or you can rollover your plan into a traditional or a Roth IRA or into an annuity. Each of these options has tax consequences which you should discuss with your tax advisor.
The first place you should look when considering where to start taking withdrawals is the account that will trigger the least taxes.
For example, withdrawals from your Roth IRA will be tax free because you invested with after-tax dollars. While you are still in a higher tax bracket, withdrawing money from your Roth IRA or other non-taxable assets is sound financial planning.
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