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How To Draw Retirement Income
 When you retire, you might draw income from a variety of sources. Which come first and how will taxes play a part? Here’s a look:
TAX-FREE INCOME
If you contributed to a Roth IRA (or Roth 401(k) plan), your forward thinking will result in a delightful retirement reality – tax-free income. If you expect you’ll tap all of your retirement income sources, this may be your first choice when drawing income. This lets your other tax-deferred income continue to grow. If you have some wealth, you might tap your Roth last with the remainder going to heirs as a future financial legacy.
TAX-DEFERRED INCOME
Some experts recommend retirees let their tax-deferred investments continue to grow for as long as possible. Because of minimum distribution rules, this is typically until age 70-1/2 when withdrawals must begin. Beware, however, of leaving so much for later that you trigger a higher tax bracket on eventual distributions.
TAXABLE INCOME
If you trade investments outside of a retirement account, own individual municipal bonds or bank CDs, or continue to work, you likely pay taxes annually. You might use all or a portion of taxable income early on, leaving other investments until later. Talk to your tax professional to learn more.
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