The Power Of Zero Show Which Retirement Accounts Should You Draw from First?
Today's episode of the Power of Zero Show sees David McKnight address one of the most important decisions you'll ever make in retirement: where you should withdraw money from first.
It's important to note that the sequence in which you draw down your retirement dollars can dramatically affect how long your money lasts and how much of it you get to keep.
Since the Trump tax cuts were permanently extended on July 4th, 2025, retirees have been presented with one of the most significant tax planning windows they may ever see.
The national debt continues to grow – with Social Security and Medicare obligations expanding every year, and interest on the national debt taking up a larger and larger share of the federal budget.
Analysts at the Congressional Budget Office and several independent economists agree that, although the 2025 extension has delayed the inevitable, it has not solved the underlying math…
In or around 2035, the Government will have to raise revenue to keep pace with rising expenditures.
Every dollar you withdraw from tax-deferred accounts – like IRAs, 401(k)s, 403bs, 457s – is a dollar tax rate that may be the lowest you're likely to see in your lifetime.
"The goal isn't to eliminate RMDs entirely but to shrink your tax-deferred bucket to the point where these distributions are completely absorbed by your standard deduction", says David. "That means tax-free distributions from IRAs and 401(k)s.
Many experts have warned people: if the U.S. doesn't right its fiscal ship of state by 2043, no combination of raising taxes or reducing spending will arrest the financial collapse of the country.
You're living in a decade where taxes are as low as you've seen in your lifetime…
…and even though the tax cuts were extended indefinitely, the long-term fiscal math still points in one clear direction.
Mentioned in this episode:
David's new book, available now for pre-order: The Secret Order of Millionaires
David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track
Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com