One of the most important decisions you'll make during retirement is how to withdraw your income (please don't pay more taxes than you need to).

There are a few things to consider when deciding where to pull retirement income from first. First, you'll need to determine your fixed income sources. This includes things like Social Security, pension income, and rental income. Once you know how much income you have from these sources, you can start to think about how to supplement it with income from your portfolio.

There are a few different things to keep in mind when deciding where to pull retirement income from first. First, you'll want to consider the tax implications of each source. For example, withdrawals from a Roth IRA are tax-free, while withdrawals from a traditional IRA or 401(k) are taxable. Maybe there's cash you're sitting on (there often is).

Here is a general guideline for where to pull retirement income from first:

  1. Brokerage account / cash. If you're retiring early, you've likely done well for yourself - which means you may have a big tax bomb once RMDs begin (Required Minimum Distributions). The years before Social Security & RMDs begin are the best years to implement tax strategies like Tax-Gain Harvesting & Roth Conversions - if those don't sound like English - I break it down in real-terms on my podcast (with examples)!
  2. IRA / 401(k). You have received a deduction all these years - and now the gov't wants their cut! 
  3. Roth IRAs. Most important account you have (it's tax insurance) and it compounds tax-free. Consider tax strategies to increase this so you pay less taxes!

It's important to note that this is just a general guideline. The best way to decide where to pull retirement income from first is to speak with a financial advisor (I of course do this, but find one that resonates most with you). They can help you create a plan that's right for you and your individual circumstances.