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This Is The Only Withdrawal Strategy That Applies To An Early Retirement

Ari Taublieb, CFP® 132 views

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This was an AWESOME Video Ari! Great examples and I loved when you put in KEY information in writing on the screen br! It was so useful I was doing screenshots thank you!!
Comment from : @rogerpresswood2204

Good video With regard to the “good timing” of doing a $280k Roth conversion there is actually no benefit to converting after a market decline In fact you could make the opposite argument to say it is a less beneficial time to convert That is because one of the primary reasons to convert is to lower future RMDs If you have a $1m IRA and it drops by 20 that has the same impact as had you done a $200k Roth conversion prior to the market decline Thus there may not be a need to do additional conversions depending on your individual circumstances It’s only the tax rate that impacts Roth vs traditional decision If tax rates are the same you end up in the same place and market gains or losses are irrelevant Here is the math $1m drops to $800k and you dont convert and it eventually doubles to $16m If you pay 25 tax you end up with $12m after tax If instead you converted the $800k and paid 25 tax and your $600k Roth doubled you end up with the same $12m Had you instead converted when your account was $1m with same facts, you end up with $15m after tax whether you converted or continued to defer Bottom line is the current vs future tax rate is the variable that matters not whether the account is up or down at any point in time
Comment from : @Bondbeer

Generating wealth is important, but protecting your capital is even more essential Once lost, rebuilding financial stability becomes significantly more challenging It's the difference between "missing an opportunity" and "losing everything" while new chances will always arise, losing your capital could bring your journey to an abrupt halt
Comment from : @OyunBabus-e4k

How well are you versed with expats that move to France?
Comment from : @jkbaumohl

I just turned 50 and I’m really stressed about my retirement withdrawal strategy I have just over £300k saved up, but with market volatility and rising living costs, I’m worried I might outlive my funds
Comment from : @Pierce-p7f

Ari, on the NUA example, if that individual stock was held in a pretax 401(k), wouldn’t you have to pay taxes on the basis first at time of withdrawal?
Comment from : @careym8437

You drag the content too long
Comment from : @Frogfrog1234

If only we had these tax levels in the UK! CGT is 18-24 on any gains over $3750 Income tax is 20 on everything over $15700, 40 on everything over $62800 and 45 on everything over $15600 It gets worse, for every $125 (roughly current exchange rate) you earn over $125,000 you also lose 675 cents of the nil rate band under $15700 meaning an effective tax rate of up to 60 on a proportion of that income when you go over $125000brWhat really irks me is we have no joint married filing either so if you are mainly a one income family like we are, you are a lot worse off than a husband and wife each earning half the amount
Comment from : @wakeywarrior

Does your software provide bumper numbers?
Comment from : @Coast_to_Coast

So what do you do with the $94,500-$120,000 Microsoft gains if you sell it for the tax write off?
Comment from : @MrMoneyManGuyPerson

I’m so over my head with all of this I just can’t seem to comprehend how to invest So it just sits in a savings account not earning any interest
Comment from : @pennylane36

if you only withdraw the initial amount on an investment, and leave the capital gains remaining in the brokerage account, do you still pay taxes on the withdrawal amount?
Comment from : @thomasstancil3923

Best videos ever! Thank you for sharing your knowledge with us
Comment from : @TracyBrown-kk9er

how does state tax, say, in California or New York, work for capital gain?
Comment from : @ZhouJi

If you have $10 million in AAPL stock in a brokerage account, you are getting about $50k in dividends each year That is the money to spend before selling any of the stock
Comment from : @justliberty4072

what if you're 57/58 and have spent your cash and investment accounts? Would you draw next from pre tax 401k and pay a 10 penalty or from roth contributions with no penalty? Or maybe take out a 401k loan and pay it back in full when you are able to withdraw without penalty?
Comment from : @gapey

Can you please share the excel which has tax bracket numbers and other details 💰
Comment from : @srujandesi9

Timing the market and time in the market are both helpful I hate that some people only do the one or the other and hate the one that they don't likebrRoth is goated Pretax/traditional is trash
Comment from : @colsonskur6714

This just makes me appreciate no capital gains tax even more💰💰💰
Comment from : @Alex-pf3tf

So, withdrawal strategies for early retirement—what’s the best way to ensure your money lasts? I’ve read about the 4 rule, but it seems like there are mixed opinions on how reliable it is
Comment from : @Leo-nj8eb

You're talking and I'm trying to follow but you're losing meall I heard was if you're willing to be dynamic yada yada
Comment from : @thriftybudget

This is a long winded way to recommend the Boggleheads Variable Percentage Withdrawal
Comment from : @shannono3167

Need advice Married, 52 years old Lost senior level Manager position in small town Need $150,000 to clear expenses to adjust to new opportunities in job market Should I pull from 401k?
Comment from : @carlsorenson8710

Thought? Why not take less when markets are doing well and the market is "re-funding" your portfolio with a much needed infusion of growth? brConversely, when the market is down, take more? brbr'Sequence of Returns' as well as withdrawal rates (discussed) go hand-in-hand I'm not suggesting taking greater sums on drawdowns or cutting back during spectacular gainsso much so that in either situation the withdrawal rate changes significantly impacts your quality of life I'm focused on sustainability and think there are guardrails, as you mentioned, that we can think about as the markets always return to the mean
Comment from : @davideberhart9523

why not increase your cash holding when the market did good and spend it down when the market is not so good so its not feast or famine?
Comment from : @garyg5347

Cost of fund Vs Projection and Capital Composition ( Equity & borrowed ) future outlook!! That sums up everything
Comment from : @mfazlurrahman5854

Had no idea you could pay 0 on capital gains if your income is low enough Definitely plan on looking into that when I retire Thanks for the tip
Comment from : @paulschaaf8880

Can I open a roth IRA for my children and contribute money into it when they start earning income if I still claim them on my taxes as a dependent?
Comment from : @CousinReggie

I recommend that new investors adopt a strategy of purchasing and holding high-quality stocks It is prudent to disregard market forecasts and opinions, as they are frequently more entertaining than genuinely beneficial
Comment from : @KimberlyMartingonzelas

THIS This is what I have been asking financial advisors and they won't give me a straight answer Thank you
Comment from : @jeffkile5015

How can you move 280k into a Roth IRA? I thought Roth is capped at $7000 per year???
Comment from : @pizza_killer5610

I have a questionif you always draw below what your total portfolio earned in a year, won't you always make money Example, let's say it's a good year and your total portfolio earned 8 If you take out 5 or 6 your portfolio is still growing Is this a correct assumption?
Comment from : @jdneilso

Great content Even the 4 rule by itself seems silly Is it 4 of the starting amount? Is it 4 of each years' balance? Even worse is all the people who were saying to go to fixed income securities when you retire But "When I retire" my time horizon is still many decades That means, keep a large portion of it in the market Looking at what you did the year before to help determine your withdrawal amount is ideal One picky point, You didn't say it wrong, but people may have missed it in your presentation When they sold and withdrew their Microsoft stock and didn't pay capital gains taxes because they didn't have other income and their capital gains were less than the 94K, it is still important to note that even though they had 90K in capital gains, they still withdrew 100K The difference is more pronounced if they only doubled their money ("only"!) If they had 200K in stock that had started as 100K, they could withdraw 180K, with 90K in capital gains, still be below the 90K capital gains level and they would have 180K in their hand
Comment from : @neilbarembaum1094

have million cash on hand before you retire-have 5m invested or converted into gold-definitely not crypto as Trump plans to ban all crypto next year
Comment from : @davedeboy5726

We are in our 50s with nearly $3M saved, no debt and $50K annual spending But we avoid the stock market completely
Comment from : @michealbrown-h3d

My wife used to say that I “nerd out” on the early retirement and spend too much time working on it I retired in 2021 at 60 with a small pension and lots of time on my hands In 2021 our net worth was approx 15 mill Mainly rental real estate and some stocks etc Recent net worth is much higher and I just bought my wife a dream home for 800k cash Believe me when I say the time spent learning to understand the details of what Ari is teaching and how it applies to your particular situation are well worth the effort! I get a new reminder or good tip every time I watch one of his videos
Comment from : @darryls8066

Why not spend from the pre tax to lower future RMD's without the need for Roth conversions?
Comment from : @Steve56-w9r

Well done! Your videos are consistently the best in-depth early retirement planning videos on YouTube
Comment from : @curtdalgleish2903

I think im sitting on too much cash I have 5 years worth so if i put more into my brokerage it will make something unless the stock market goes south of coursewish i had a crystal ball
Comment from : @hownwen

Love the spreadsheet I'm retired early and have one I put together myself that includes ACA subsidies We do not let taxes determine what we do with our brokerage accounts We make buy/sell decisions on our own criteria and rebalance accordingly We are currently less weighted in stocks and more short term treasuries because of the currently high rates on the treasuries At the end of the year, we maximize our tax situation by making a partial roth conversion Main goal is to make full use of the zero rates on long term capital gains
Comment from : @darrenmatthews1667

Run-on sentences much?
Comment from : @solarmax0072

Roth conversion during a down market - genius!
Comment from : @leem6011

If you're pulling funds from brokerage and also pretax, do you have to watch out for the capital gains bump zones?
Comment from : @Snipely

Financial planning is a sales job To real estate agents it's always a good time to buy and sell To financial planners it's always good to maximize commission which means more assets under management, fromt loaded funds, or high commission financial products like life insurance brbrAlways consider the financial motivation behind any sales advice This is not to say there are not great financial planners (including this guy) brbrRichest people i know bought stocks ((or orher assets) and held them and don't touch them If you let commissions, money management fees and capital gains recur you will be way behind brbrYou can also live much cheaper in retirement and should not need close to what you did when working full time and supporting a family brbrMost importantly, don't let comissions eat away your account when extremely low fee funds are available and this is very simple stuff Check out vanguard and pay low fees Pay advisors a flat fee for advice if you need some Pay them well if they have proven track records
Comment from : @tk70707

I guess I’m a little bit surprised that people without kids or a legacy plan would be very interested in Roth conversions It sounded like it worked out well for them, but I’ve never thought about it being this type of strategy
Comment from : @TheRemyRomano

15:01 if you’re already in a high tax bracket, how could taking money from an IRA, taxable at your marginal rate, be more tax-efficient than taking capital gains, even if at 20? (Ignoring the fact that, if you’re in a high tax bracket, why are you doing either?) Unless your goal is maximizing an estate and taking advantage of a step-up in basis
Comment from : @rdspam

This guy looks like the Annoying Orange brNow I can't unsee it
Comment from : @devilmonkey427

If you have a year of tax valley, why not convert some IRA to ROTH instead of LTC? Which one is more tax efficient?
Comment from : @yifanwang

pre tax and after tax means nothing if ur tax bracket doesnt change, no one seems to understand the math but with same contributions one pre tax money one with tax assuming same growth same time frame ur gains are legit equal, its mathematically impossible for one to be better than another fundamentally ONLY if ur tax bracket changes
Comment from : @asuragod_lol3275

Can you convert your pretax account to a Roth IRA?
Comment from : @kevinfreimarck3301

You are a great speaker, Ari, not just with regard to content, but also with clarity, incorporating great examples, and a strong positive energy Thanks
Comment from : @ScottinValbom

Thanks for the information really useful I am ready to start converting but unclear if I can pull the tax money from the actual transfer or if I need to come up with the money from another account Thanks
Comment from : @MAELOB

I am at the beginning of my "investment journey", planning to put 85K into dividend stocks so that I will be making up to 30 per year in dividend returns Any advice?
Comment from : @Anitasolomon-u4p

Love this video!!! I have been listening to you tube university for years and LOVE this info and they way it is presented !! Thank you 👍
Comment from : @BarbaraBarnette-g9y

If I’m single and my taxable income is less than $47,000 a year and I sell my home, will I owe 0 in capital gains from the sale? (I’ve lived in the house 25 years)
Comment from : @Tricia54

Do you recommend tax loss harvesting in retirement?
Comment from : @Nardog1554

Great stuff Thanks
Comment from : @deanchilton

guyton Klinger method
Comment from : @aknorth1053

Ari, what should the withdrawal strategy be if my wife and I have a combined pension of about $80,000 per year but want to have an annual budget of $120,000 at age 50?
Comment from : @benmccarty4598

I withdraw money bases on the performance my investment This is to make sure i am sufficient money for the rest of my life
Comment from : @popovdes5576

Bucket strategy works for me
Comment from : @PJBHolden

This only works if your low income but a lot of people have 15000000 or more in pensions and social security I guess we are just trying to stay out of the 37 bracket
Comment from : @SuperMatt1235

All of the studies are irrelevant based on economics that have changed forever looking forward Also the aggressive market money can tank anytime and your longevity is total guess work Future tax rates are unknown In other words financial advisors are selling educated guesses period They don’t know what is going to happen in Your life so your plan is as good as theirs Your expenses are the variable only you know Advisors had no answers in 2008 except don’t look at your losses
Comment from : @johnscott5799

It's recommended to save at least 20 of your income in a 401k You can use online calculators to estimate how much you should save based on your age and income Saving at least 20 of your income in a 401(k) can help ensure that you have enough money to retire comfortably By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time
Comment from : @austinbar266

Most people won't live to see 30 years in retirement, so the 4 rule is actually too low just on that alone
Comment from : @ItsEverythingElse

Your thoughts on: Married with 1 kid - what is the order of withdrawal from retirement accounts (401K, 403B, Roth IRA, Pension, Brokerage) with regards to the 10-year mandatory withdrawal for heir
Comment from : @MyFinancialJourney2027

Great information presented in a "user-friendly" manner for all us folks who are not CFPs You've earned my sub! (You actually remind me a lot of my personal CFP!)
Comment from : @misterskippy2u

You know that in the 4 rule, the financial advisor's fees comes out of that too
Comment from : @ralphparker

Is it possible if i can get the tax sheet you showed
Comment from : @Lik3ToSing

ARI brCheck outbrDaniel toshbr1st cdbrTrue stories I made up br😂
Comment from : @LoveKills70

I retired six years ago at 55 with $200K in the bank I take out what I need Whatever it is I keep all my money SAFE in the bank I have a mortgage, car payment, and am sending my son to college No problems
Comment from : @miketheyunggod2534

Really well done videobrWhy doesn't everyone do this?
Comment from : @LoveKills70

Great video 👍
Comment from : @bruced370

Great content, very helpful for early retirement
Comment from : @FatFIREfamily

Just love your content! My thought process is very similar to yours I’m all about not stuffing oneself in the box My OCD won’t allow me to consider a blanket 4 approach I will be looking for optimizing the strategy based on what’s happening for sure Thank you Ari!
Comment from : @irisflower9030

I disagree it’s better to convert when markets go down (I am not saying not to convert just that it does not improve the result vs markets going up) Reasons brbr1 One main reason to convert to Roth is that you have a high pre tax balance and want to reduce RMDs Let’s say you have $1m balance and convert $100k and pay tax If markets drop by 10, you have achieved the same reduction in IRA balance/future RMD without paying tax If your IRA is on the cusp as to whether or not converting makes sense, a market decline can make the math less beneficial to convert brbr2 No one knows when we will hit a bottom Markets went down in 2022 but recovered in 2023 so in hindsight it was a good time to convert and take advantage of the market gains but what if you converted at end of 2022 and markets continued to drop in 2023 brbr3 The math comes out the same whether markets are up or down It only matters when you pay the tax what the rate will be with goal of paying lower rate
Comment from : @Bondbeer

Great video! Is the 2024 important numbers document that you refer to available to download? Thanks!
Comment from : @ahsugoi

Ready to 🤓 out!
Comment from : @boricua_in_wa

Rebalancing /adding more liquid when equities are frothy and mmkt yields high is just prudent and how we got to retire early in the first place
Comment from : @7SideWays

phenomenal video, Ari ⭐ bryour content is truly making a difference for me at 50, I'm making changes to how I'm planning for early retirement when I talk to my financial advisors through my employer, they often pause and say something like "actually, that's really smart" 😂
Comment from : @MidlifeCrisisManagement

Can you do a video on Guyton's guardrails with examples?
Comment from : @hollyc3838

You are very smart! Love to see young folks looking at this so closely! Few have your wisdom
Comment from : @briarcliffbabe

Hey, do you need any help for your video editing or thumbnails, if so we can help
Comment from : @wecreatescreators

"Love this video on 'The Only Withdrawal Strategy for Early Retirement'! It's intriguing to see how this strategy applies specifically to early retirees The clear guidance and numerical insights make planning for financial independence more accessible Excited to delve deeper into optimizing retirement strategies!"
Comment from : @liveandretireusa