You are retired or about to retire and you have all of these different accounts. Some are qualified and some are unqualified, and your eyes roll to the back of your head when you think about untangling all of these accounts.
One thing you may not have initially thought about is which account is the best as a transfer vehicle to your heirs after you take the “Long Goodbye”.
Qualified assets the government has a say as to when the funds need to be withdrawn and taxed. With non-qualified assets, you have greater control and not the government.
Roth’s fall into the non-qualified asset category.
You will want to utilize your non-qualified assets first is your goal is to transfer funds to the next generation. But those qualified assets will be taxed at your ordinary income rate.
That old adage of paying less taxes in retirement is a myth. Unless your lifestyle drops significantly your cash needs will remain the same, so will your taxes if they are coming from qualified funds.