Q: In retirement, what assets should I draw down first.? My 401k, brokerage account stocks, or cash? I am 65 and also taking Social Security.
A: This is a great question that is very common. The answer as with most investment questions, is “it depends”. It largely depends on your tax rate in retirement. If you can maintain a low tax rate, and have similar assets across pre-tax accounts (IRAs, 401Ks) and after-tax accounts, you can draw from pre-tax accounts at low tax rates and leave more tax efficient assets for heirs or later distributions.
If your tax rate is higher then, more considerations need to be made.
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