Spoiler Alert! The answer is "It Depends". If you are expecting a simple one size fits all answer you won't find it in this video. The goal of the video is to provide education on the subject to help you understand some of the key factors. It will be different for each person depending on your unique financial situation. For a professional plan you could consider working with my firm www.martinsenwealth.com/
I came across your channel through this video-case studies are incredibly valuable, and I'm eager to see more in the future! Building wealth involves establishing routines, like consistently setting aside funds at regular intervals for smart investments.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having a mentor cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
NICOLE ANASTASIA PLUMLEE is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@BarbaraHarper-c1p However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
Surprise! Happy 73rd birthday! Uncle Sam wants to have a little chat. I guess you have all your money in brokerage…if so, then yes. Otherwise, those tax free Ira’s we all were encouraged to set up and invest in? Well, Uncle wants his cut.
Great presentation. There is one more thing that can be added in the "Tax Advantaged" bucket, an "HSA". It goes in Pre-Tax, the balance over a prescribed limit can be invested and earn market returns, and (as long as the money is used for an approved health expense) is also Tax Free to spend anytime.
My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit
The stock market is a way to hedge against inflation. Most notably amidst recession, investors need to understand where and how to allocate funds to hedge against inflation and still make profits.
@@vuhoahua The advisor that guides me is DEBORAH DIVITO WELCH most likely the internet is where to find her basic info, just search her name. She's established
Trying times are ahead, and good personal financial management will be very important to weather the storm. It would be very a innovative suggestion to look out for Financial Advisors like "DEBORAH DIVITO WELCH", who can help shape up your portfolio.
I began accumulating wealth when I started following up my investment properly, The value of expert mentorship cannot be overstated. Without proper mentoring, people tend to make mistakes and loose money. This is why I prefer to invest with DEBORAH DIVITO WELCH because her methods are unique and extremely profitable.
I totally agree with the person who said that you did not clearly answer the question posed in the video. Thank goodness I have my financial totally together but was curious if you would answer the question. I think that in your previous videos you have done a good job of clarifying details but not in this video.
Thank you for your comment! The reson is because it is not a simple answer. It depends on a persons situation and assets and sources of income. The goal of the video is to make you aware of the concept but the answer will vary greatly for each unique situation. I recommend finding a planner that is skilled in distribution retiremetn planning to help map it out for you.
I find it very interesting that we always presume the taxes will be higher in the future. And while I think all of us would agree and it is very logical for future tax planning purposes, if we are to go back in time to those that were using this philosophy years ago, then they were screwed by the tax cuts and jobs act which lowered taxes for a number of years for everyone. Anyone who aggressively pursued this philosophy back then ended up spending more in taxes.
You don't convert all of your funds only the right amount so you have some tax diversification. Roth money should be the last money you would tap into for long term tax free growth.
The Tax cut and jobs acts helps but isn't earth shattering. What can make big differences is doing the right thing at the right time like roth conversions to avoid social security, RMD and capital gains hurdles. You have to develop a forward looking income/tax plan to see if you are heading in a bad direction and take action accordingly. IF you end up with big RMDs, then the IRA withdrawals will be taxed to the max and so will the long term Cap gains and SS. But don't optimized on tax savings, optimize on spendable net worth. For instance, you can't spend any IRA monies without tax consequences. Roth has no tax consequences and there may some capital gains associated with regular accounts along with interest and dividends each year.
At 10:00. I know you're simplifying for your comparison, but tax rates for tax advantaged and tax postponed really aren't the same. Tax postponed contributions reduce tax at the *marginal* rate but distributions are taxed at the *average* rate (all else being equal). For example, if you contribute to a 401k while making $150k/yr, you reduce taxes by 24% of the amount saved. But later if you withdraw $150k/yr, assuming your 401k distribution is your only income, it will be taxed at all tax rates starting at 0% (for the standard deduction) and only a fraction will be taxed at 24%. Even if you have SS (or some other source of fixed income), your 401k distribution will be taxed at the average rate starting with where SS leaves off--which I guarantee won't be in the 24% tax bracket!
Understood! Thank you for your comment! Everyone's situation is different and I am teaching general concepts. We believe taxes will be higher in the future. As of 2026 all brackets are increasing and that will likely be just the begining of higher taxes. There is wisdom in tax diversification and in taking advantage of what I believe are the lowest taxes rates of our lifetime.
You are simply amazing... my wife and I are so worried about this topic that I started the process of your 20-page report for strategies. Unfortunately my wife and I did not start a 401k or Roth until we turn 55 so we have a sort of an uphill battle going on LOL
I just plan on living off my pension, rental income, and social security. My 401k and IRA are reserved until RMD time, and the remaining balance for the kids upon my death.
Sorry to disappoint. The answer is not a simple answer, it will be different for each person based on your situation, type of assets, age, etc. If I was to attept to give a simple answer from a tax stand point, you want to do tax bracket management, meaning you fill up the lower tax brackets with qualified funds and then switch to non-qualified to keep you from going into the higher brackets each year. If you have the time and it make sense then shifting some to Roth through Roth conversions can be very important to help reduce future RMDs and to helpfully avoid tax on your Social Secuiry benefits.
If you don’t need the money then the taxable brokerage account is the same as the tax advantaged for your heirs and you can argue the brokerage account is better during your lifetime as you can harvest losses as well as deferring gains and passing it on with a step up in basis. I have had a brokerage account for 40 years and never paid $1 of capital gains (although I do have some dividends and harvest my losses annually). My plan is to try to spend down as much of my tax deferred money as possible and let the rest grow to be passed down tax free.
The presenter didn't answer the question asked in the title of the video. He just explained why it was important, and what things to consider. And he did it in the most long-winded possible presentation. Every section of the video was essentially, "it depends". At the end of the video, the conclusion was, buy my book, or hire someone like me to figure out the answer for you. Not sure which I dislike more, the government that created our horrible retirement system, or the accounting and legal vultures which drain your hard earned savings by being paid to "manage" it or provide ongoing advice on how to game the system.
You do make a very good point. So, I fortunately have a pension that guaranteed till I die but then I promise there’s no cost-of-living adjustment so for me waiting to collect Social Security might be the best thing. And yes, I don’t like the fact he doesn’t answer the question, we should give three different answers to the three different scenarios or something like that.
Hi David, I just bought your book. Missing from your talk is the tax affect to social security distributions, give the three scenarios. I assume, the tax advantages distribution would be significantly better. Do you cover this in your book? Thanks, Steve
Supplement your fixed income $ (SS, pension, annuities) from annually taxed (AT) accounts first. When you must begin RMD's from tax-deferred (TD) accounts or once your AT is depleted, whichever comes first, begin to drawdown TD accounts. Once the AT and TD accounts are depleted, begin withdrawals from tax-advantaged (TA) accounts. Once all three are depleted, die. This will allow your funds to grow tax-free for as long as possible. Of course, tax brackets can become another issue but basically, that is the answer.
It is not a one size fits all answer. It will depend upon your unique situation. The idea of the video is to provide some general education on the topic to help you in your planning.
The answer will be different for each person depending upon your situation. The video is to provide some education on the subject but there is no "one size fits all" answer.
A tax increase could certainally impact the first bucket as well. Investments within the first bucket you are dealing with long term and short term capital gains.
What pile is stock? I was planning on selling my stock over the next 4 years to use with my pension until I start SS at 67 for the full benefit. I also have a regular and Roth 401k, but was thinking I'd pay less taxes selling the stock.
It depends on what type of account you hold the stock in. If it is in a personal account (not a IRA, 401k, 403b or Roth as examples) you are correct. It would be best to use those funds first. Hopefully, you have plenty of gains and if you do, try to hold them for at least 1 year before selling so they are treated as long-term gains which will lower your tax bill. Also, if your personal accounts can last longer, every extra month past age 67 you deferrer taking SS will increase your monthly benefit. Best wishes and congratulations on your retirement.
At the 11:40 mark you stated that depending on age you may want to get some money converted before required distributions kick in to avoid higher tax. I just retired in Aug 2022. I closed my company 401k and Roth by transferring into managed IRA & Roth investment accounts through Northwestern Mutual. I also have a fixed annuity through another company. So is it too late to convert? Also I didn't really understand what would be converted and to where?
Unfortunately, the average American has less than $300k for retirement. So they take SS at 62. But if you can, that's the best answer (provided you want to leave $ to your kids). Even better if you have it in a tax-advantaged account.
@@harryday62 Taxable acct, qualified dividends are treated better, on the LT capital gain schedule. For estate planning, taxable account, heirs get stepped up cost basis. Roth account, tax free must be dispensed in 10 years. Traditional IRA, all taxable and must be dispensed in the 10 years.
Have you heard about the Universal Index Fund that your premium earns cash value with coverage from long term, chronic condition and death benefits and once you take out cash it is tax free? What can you say about this option? @lanemartinsen
Hi Flisa, Yes I have one personally and we recommend them to some of our clients. It will not be a good fit for some people and and excellent fit for others. They need to be properly structured.
Spoiler Alert! The answer is "It Depends". If you are expecting a simple one size fits all answer you won't find it in this video. The goal of the video is to provide education on the subject to help you understand some of the key factors. It will be different for each person depending on your unique financial situation. For a professional plan you could consider working with my firm www.martinsenwealth.com/
I came across your channel through this video-case studies are incredibly valuable, and I'm eager to see more in the future! Building wealth involves establishing routines, like consistently setting aside funds at regular intervals for smart investments.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having a mentor cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
This aligns perfectly with my desire to organize my finances prior to retirement. Could you provide me with access to your advisor?
NICOLE ANASTASIA PLUMLEE is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@BarbaraHarper-c1p However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
@@JonathanBram Oh please I’d love that. Thanks!
@@BarbaraHarper-c1p Clementina Abate Russo is her name
Lookup with her name on the webpage.
1.75X speed really helps 👍🤑
Always, sometimes 2x speed depending on the narrator.
If you develop a dividend strategy you do not have to pull funds from anywhere, you just let the dividends pour in.
Until RMDs are required.
@@ralphparker Those are from IRAs; my dividend stocks are in a taxable account.
Surprise! Happy 73rd birthday! Uncle Sam wants to have a little chat. I guess you have all your money in brokerage…if so, then yes. Otherwise, those tax free Ira’s we all were encouraged to set up and invest in? Well, Uncle wants his cut.
The best place to draw funds from is someone else's account.
You must work for the government, in the IRS, perhaps?
Lol
OMG you got me laughing my ass off
even if you get caught , you get three meals a day , an exercise yard, and a roof over your head
@@Crowns57854You mean, support unlimited defense spending, by both parties.
Great presentation. There is one more thing that can be added in the "Tax Advantaged" bucket, an "HSA". It goes in Pre-Tax, the balance over a prescribed limit can be invested and earn market returns, and (as long as the money is used for an approved health expense) is also Tax Free to spend anytime.
I just found your channel. I really appreciate your calm and systematic method of teaching us. Thank you so much. I have subscribed.
Thank you!
Yes he's very knowledgeable but sometimes I fall asleep LOL
My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit
The stock market is a way to hedge against inflation. Most notably amidst recession, investors need to understand where and how to allocate funds to hedge against inflation and still make profits.
@@vuhoahua The advisor that guides me is DEBORAH DIVITO WELCH most likely the internet is where to find her basic info, just search her name. She's established
Trying times are ahead, and good personal financial management will be very important to weather the storm. It would be very a innovative suggestion to look out for Financial Advisors like "DEBORAH DIVITO WELCH", who can help shape up your portfolio.
I began accumulating wealth when I started following up my investment properly, The value of expert mentorship cannot be overstated. Without proper mentoring, people tend to make mistakes and loose money. This is why I prefer to invest with DEBORAH DIVITO WELCH because her methods are unique and extremely profitable.
I totally agree with the person who said that you did not clearly answer the question posed in the video. Thank goodness I have my financial totally together but was curious if you would answer the question. I think that in your previous videos you have done a good job of clarifying details but not in this video.
Thank you for your comment! The reson is because it is not a simple answer. It depends on a persons situation and assets and sources of income. The goal of the video is to make you aware of the concept but the answer will vary greatly for each unique situation. I recommend finding a planner that is skilled in distribution retiremetn planning to help map it out for you.
My breakdown 60% tax deferred. 25% taxable brokerage with high cost basis and 15% tax free (including house and life insurance and small Roth).
I find it very interesting that we always presume the taxes will be higher in the future. And while I think all of us would agree and it is very logical for future tax planning purposes, if we are to go back in time to those that were using this philosophy years ago, then they were screwed by the tax cuts and jobs act which lowered taxes for a number of years for everyone. Anyone who aggressively pursued this philosophy back then ended up spending more in taxes.
You don't convert all of your funds only the right amount so you have some tax diversification. Roth money should be the last money you would tap into for long term tax free growth.
The Tax cut and jobs acts helps but isn't earth shattering. What can make big differences is doing the right thing at the right time like roth conversions to avoid social security, RMD and capital gains hurdles. You have to develop a forward looking income/tax plan to see if you are heading in a bad direction and take action accordingly. IF you end up with big RMDs, then the IRA withdrawals will be taxed to the max and so will the long term Cap gains and SS. But don't optimized on tax savings, optimize on spendable net worth. For instance, you can't spend any IRA monies without tax consequences. Roth has no tax consequences and there may some capital gains associated with regular accounts along with interest and dividends each year.
At 10:00. I know you're simplifying for your comparison, but tax rates for tax advantaged and tax postponed really aren't the same. Tax postponed contributions reduce tax at the *marginal* rate but distributions are taxed at the *average* rate (all else being equal). For example, if you contribute to a 401k while making $150k/yr, you reduce taxes by 24% of the amount saved. But later if you withdraw $150k/yr, assuming your 401k distribution is your only income, it will be taxed at all tax rates starting at 0% (for the standard deduction) and only a fraction will be taxed at 24%. Even if you have SS (or some other source of fixed income), your 401k distribution will be taxed at the average rate starting with where SS leaves off--which I guarantee won't be in the 24% tax bracket!
Understood! Thank you for your comment! Everyone's situation is different and I am teaching general concepts. We believe taxes will be higher in the future. As of 2026 all brackets are increasing and that will likely be just the begining of higher taxes. There is wisdom in tax diversification and in taking advantage of what I believe are the lowest taxes rates of our lifetime.
You are simply amazing... my wife and I are so worried about this topic that I started the process of your 20-page report for strategies. Unfortunately my wife and I did not start a 401k or Roth until we turn 55 so we have a sort of an uphill battle going on LOL
I just plan on living off my pension, rental income, and social security. My 401k and IRA are reserved until RMD time, and the remaining balance for the kids upon my death.
Thank you for posting this helpful and informative video
You never answered the question posed in your title. Was this video click bait for plugging your book? I'm disappointed.
Sorry to disappoint. The answer is not a simple answer, it will be different for each person based on your situation, type of assets, age, etc. If I was to attept to give a simple answer from a tax stand point, you want to do tax bracket management, meaning you fill up the lower tax brackets with qualified funds and then switch to non-qualified to keep you from going into the higher brackets each year. If you have the time and it make sense then shifting some to Roth through Roth conversions can be very important to help reduce future RMDs and to helpfully avoid tax on your Social Secuiry benefits.
If you don’t need the money then the taxable brokerage account is the same as the tax advantaged for your heirs and you can argue the brokerage account is better during your lifetime as you can harvest losses as well as deferring gains and passing it on with a step up in basis. I have had a brokerage account for 40 years and never paid $1 of capital gains (although I do have some dividends and harvest my losses annually). My plan is to try to spend down as much of my tax deferred money as possible and let the rest grow to be passed down tax free.
Thank you…I’ve been thinking about this lately.
I think using a marginal tax rate is more realistic, 25% on 38k isn’t realistic and hasn’t been for decades. This is a great demonstration thou!
For most people, their taxable income will be much lower once they retire. Which means they will be in a lower tax bracket. You didn’t mention that.
The presenter didn't answer the question asked in the title of the video. He just explained why it was important, and what things to consider. And he did it in the most long-winded possible presentation. Every section of the video was essentially, "it depends". At the end of the video, the conclusion was, buy my book, or hire someone like me to figure out the answer for you. Not sure which I dislike more, the government that created our horrible retirement system, or the accounting and legal vultures which drain your hard earned savings by being paid to "manage" it or provide ongoing advice on how to game the system.
You do make a very good point. So, I fortunately have a pension that guaranteed till I die but then I promise there’s no cost-of-living adjustment so for me waiting to collect Social Security might be the best thing. And yes, I don’t like the fact he doesn’t answer the question, we should give three different answers to the three different scenarios or something like that.
Only two things are certain: Death and taxes. Just withdraw as little money as you need and pay the taxes man. Lol
I’m young advisor at a firm. You put great content. I also read your book it’s great.
Well, watching this video was taxing...and 10 minutes too long with the info presented. ROI was very low ... Book promo vid.
Hi David, I just bought your book. Missing from your talk is the tax affect to social security distributions, give the three scenarios. I assume, the tax advantages distribution would be significantly better. Do you cover this in your book? Thanks, Steve
So what's the answer for the question? You didn't really answer it. I'm surprised about that.
Supplement your fixed income $ (SS, pension, annuities) from annually taxed (AT) accounts first. When you must begin RMD's from tax-deferred (TD) accounts or once your AT is depleted, whichever comes first, begin to drawdown TD accounts. Once the AT and TD accounts are depleted, begin withdrawals from tax-advantaged (TA) accounts. Once all three are depleted, die. This will allow your funds to grow tax-free for as long as possible. Of course, tax brackets can become another issue but basically, that is the answer.
Never answered the question.
It is not a one size fits all answer. It will depend upon your unique situation. The idea of the video is to provide some general education on the topic to help you in your planning.
What happens if your tax rate goes down during distribution because your income is less in retirement.?
But what is the answer to the title on your video?
The answer will be different for each person depending upon your situation. The video is to provide some education on the subject but there is no "one size fits all" answer.
Why an increase in taxes of 10-20% is affecting the second bucket, but not the first?
A tax increase could certainally impact the first bucket as well. Investments within the first
bucket you are dealing with long term and short term capital gains.
What pile is stock? I was planning on selling my stock over the next 4 years to use with my pension until I start SS at 67 for the full benefit. I also have a regular and Roth 401k, but was thinking I'd pay less taxes selling the stock.
It depends on what type of account you hold the stock in. If it is in a personal account (not a IRA, 401k, 403b or Roth as examples) you are correct. It would be best to use those funds first. Hopefully, you have plenty of gains and if you do, try to hold them for at least 1 year before selling so they are treated as long-term gains which will lower your tax bill. Also, if your personal accounts can last longer, every extra month past age 67 you deferrer taking SS will increase your monthly benefit. Best wishes and congratulations on your retirement.
At the 11:40 mark you stated that depending on age you may want to get some money converted before required distributions kick in to avoid higher tax. I just retired in Aug 2022. I closed my company 401k and Roth by transferring into managed IRA & Roth investment accounts through Northwestern Mutual. I also have a fixed annuity through another company. So is it too late to convert? Also I didn't really understand what would be converted and to where?
@@richardcolaluca2100 thank you for clarifying.
What if you decide to live off stock dividends only then taking Social Security at 70?
Possible, but dividend will also be tax.
Unfortunately, the average American has less than $300k for retirement. So they take SS at 62. But if you can, that's the best answer (provided you want to leave $ to your kids). Even better if you have it in a tax-advantaged account.
@@harryday62 Taxable acct, qualified dividends are treated better, on the LT capital gain schedule. For estate planning, taxable account, heirs get stepped up cost basis. Roth account, tax free must be dispensed in 10 years. Traditional IRA, all taxable and must be dispensed in the 10 years.
Just retire overseas and don’t worry about American broken healthcare system or running out money at old age.
Should I take taxes out of my ss check?
I would. It would be just one less thing to worry about.😊
Wasted 13:41 minutes.
So "Which accounts should you withdraw funds from first in retirement?"
The answer is "it depends". There is not a one size fits all answer.
Keep all cash under your mattress and spend as needed in retirement. No taxes to worry about lol. Just kidding.
He looks like Forrest Gump.
Momma always said "Live is like a box of chocolates!"
Retired sept 2021 biggest fear ,the biden administration
Retired January 2022. My biggest fear of a second trump administration.
Have you heard about the Universal Index Fund that your premium earns cash value with coverage from long term, chronic condition and death benefits and once you take out cash it is tax free? What can you say about this option? @lanemartinsen
Hi Flisa, Yes I have one personally and we recommend them to some of our clients. It will not be a good fit for some people and and excellent fit for others. They need to be properly structured.