When you’re working, the focus is often on what you earn from your investments. But in retirement, what you keep after taxes can matter even more.

That’s why the order in which you withdraw from your investment accounts can have a meaningful impact. It may influence how much you pay in taxes, how long your portfolio lasts, and even what you’ll pay for Medicare premiums.

Here’s a general framework that financial professionals often consider when building tax-aware withdrawal plans:

• Start with taxable accounts. These are brokerage or investment accounts where taxes have already been paid on contributions. Selling investments from these accounts may trigger capital gains, which are often taxed at lower rates than ordinary income.
• Then consider tax-deferred accounts. Withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income. By spreading these distributions over time, you may reduce the chances of being bumped into a higher tax bracket later.
• Preserve Roth IRAs for later. Roth accounts grow tax-free, and withdrawals are generally tax-free in retirement. Plus, Roth IRAs aren’t subject to required minimum distributions (RMDs), making them a valuable tool for later-life needs or legacy planning.

A Hypothetical Example

Imagine a retired couple, Elaine and Bill. They have a mix of taxable, tax-deferred, and Roth accounts. After reviewing their situation and long-term goals, a strategy was developed that began with their taxable assets, incorporated modest distributions from their IRA to manage future tax exposure, and left their Roth IRA intact for later.

This approach helped them create a more predictable tax picture and supported their long-term planning objectives.

Tailored to You

Of course, the best strategy depends on your personal circumstances—things like your income needs, tax bracket, account types, family or charitable goals, and how markets perform over time.

That’s why we take a collaborative and proactive approach. At Hill, we coordinate closely with your tax professionals and use evidence-based planning tools to help ensure your withdrawals are as tax-efficient as your investments are intentional.

Want to explore your retirement income strategy or review your current plan? We’re here to help—and to take the long view with you.

Hill Investment Group does not provide tax or legal advice. You should consult with a qualified tax professional regarding your individual circumstances.

At Hill Investment Group, we go where the talent is—and where you are. Our team spans three physical offices in St. Louis, Nashville, and Houston, with additional team members in Boston, New York, Austin, and San Diego. More importantly, our clients are in 30+ states across the country.

What does this mean for you? No matter where life takes you, we’re ready to serve you with the same high level of care and expertise.

This month, we hosted a fantastic webinar to share the details of our upcoming ETF launch, and we couldn’t be more thrilled with the response. The great questions from attendees reflected the thoughtfulness of our clients and their shared commitment to smarter, evidence-based investing.

Excitement is building, not just among our clients but also from other advisory firms across the country eager to offer the same advantages to their own clients. It’s clear that our approach and strategy, combined with the tax-benefits of the 351 conversion, resonate with investors trying to move toward the most efficient evidence-based investment solution tax-free.

This ETF is more than a product; it’s a philosophy in action. And as we approach the holidays, we’re proud to think of it as the gift we’re giving to help you and your portfolios grow stronger for years to come.

Stay tuned—2025 is already shaping up to be a remarkable year.