“It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.” — Will Rogers

You may have a firm idea of where to take income from—but default decisions may create unnecessary taxes and risks.

Most people nearing and in retirement, have spent decades building their retirement savings. As we meet with retiring clients, one critical question that needs answering is: Where should you take income from first?

Additionally, while this survey is dated (Schwab Survey Finds High Anxiety Among ‘Pre-Retirees’ | Charles Schwab) it does point to the very real sense of being overwhelmed and anxious about the transition from an earned paycheck to living off of what you’ve saved, invested, Social Security and Pensions, if you have one.

There are Three Major Buckets² of income:

1. Taxable Accounts
2. Tax-Deferred Accounts (IRA/401k)
3. Tax-Free Accounts (Roth)

Why It Matters:
Savvy withdrawal strategies can mitigate taxes, Medicare premiums, and reduce portfolio longevity (running out of money before you run out of life).

Default Strategy:

Taxable → Tax-Deferred → Roth

Advanced Strategy:
Strategic withdrawals that manage tax brackets, avoid IRMAA thresholds, and coordinate with Social Security.

·        McKnight works with your tax Advisor and maintains Tax Planning resources to help you identify potential “tax” potholes and opportunities.

Hidden Risk:
Sequence of returns risk¹—early market losses combined with withdrawals can significantly reduce portfolio longevity.

Conclusion:
Retirement success depends on turning savings into efficient income.

Call to Action:

Let’s build your Your Best Life™ Income Plan today.  How to reach us:

fs@mcknightadvisory.com  615 895 8574

1: What Is Sequence-of-Returns Risk? | Charles Schwab

2: ‘Tax Bucket' Retirement Strategy: What You Need to Know | Kiplinger

Disclosure

McKnight Advisory Group does not provide legal or tax advice and cannot guarantee rates or issuance of any insurance product. Communications and discussions regarding any tax or legal issues do not constitute legal, tax or accounting advice. Information contain herein believed to be correct but is not guaranteed. Always confirm benefits, dates and costs before enrolling. Review follow up materials to make sure you received the benefits, premiums, account type and/or effective dates for which you enrolled. All information is subject to change without notice. Not FDIC insured. Past Performance does not guarantee future results. You may lose money. Securities and advisory services offered through Silver Oak Securities, Inc., Member FINRA/SIPC. Silver Oak and McKnight Advisory Group are not affiliated.