Episode 207: Your Tax Questions Answered: 401(k)s, Roth Conversions, and RMDs

In this episode of Retire With Style, Alex and Wade answer listener questions on key retirement planning topics. They discuss penalty-free withdrawals from 401(k)s, the role of Roth conversions for both younger savers and retirees, and the distinctions between qualified and non-qualified accounts. They also examine how long-term demographic trends may influence market expectations and investment strategies in the decades ahead.

 

Takeaways

• The rule of 55 allows penalty-free withdrawals from 401(k) plans if employment is terminated after age 55.
• Roth conversions should be considered based on current and future tax rates.
• It's important to fill your standard deduction to minimize tax liabilities.
• The after-tax safe withdrawal rate differs between account types due to ongoing taxes.
• Demographic trends are known and factored into market pricing over time.
• Diversification across asset classes remains a key strategy for long-term investment success.
• Understanding the implications of RMDs is crucial for tax planning in retirement.
• Financial planning software can help manage taxes and withdrawals effectively.

Chapters

00:00 Introduction and Overview 03:01 Understanding the Rule of 55 10:56 Roth Conversions: Strategies and Timing 21:34 Tax Implications of Withdrawals 25:26 Demographic Trends and Market Predictions

 

Links

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The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”