Orchestrating your retirement strategy

An orchestra is a collection of instruments, each with its own voice. But it’s the conductor who brings them together to create harmony.

The same can be said for your retirement planning.

Your 401(k), Traditional IRA, Roth IRA, and taxable savings each play a role – but it’s the coordination between them that can bring your vision of retirement to life.

Understanding the hierarchy of savings

Most of us have limited resources to set aside for retirement. That’s why it’s important to prioritize.

A typical savings hierarchy might look like this:

• Start with your 401(k), especially if you receive employer matching
• Contribute to a Traditional IRA or Roth IRA – based on eligibility
• Then direct additional funds to taxable savings or brokerage accounts

Keep in mind: contributions to a Traditional IRA may be fully or partially deductible, depending on your situation. Roth IRAs, on the other hand, offer tax-free withdrawals in retirement – but come with income limits and a five-year holding rule for earnings.

Making investments work together

How you invest across your accounts matters. One strategy is to mirror your target asset allocation across each account. Another is to get more strategic:

• Hold income-generating assets, like bonds, in tax-deferred accounts
• Use taxable accounts for assets with potential capital gains, like stocks

This approach can help you manage your overall tax burden. Just remember: all investments carry risk, and there’s no guarantee that any strategy will prevent loss.

Planning your withdrawals

Once you retire, coordinating withdrawals from your accounts can help extend your savings and manage your tax exposure.

Some strategies include:

• Drawing from taxable accounts first to allow tax-deferred savings more time to grow
• Withdrawing from underperforming accounts first, letting stronger ones continue working
• If you have both Traditional and Roth IRAs, your expected future tax rates can guide which one to draw from first

For example, if you anticipate higher taxes later, you may want to take Traditional IRA withdrawals earlier. Or, you could withdraw up to the top of your current tax bracket from the Traditional IRA, then use Roth funds after that.

And don’t forget: under current law, most retirees must begin taking required minimum distributions (RMDs) from their Traditional IRA or 401(k) by age 73.

Every retirement plan needs a conductor

No two financial journeys are the same. That’s why it’s important to build a strategy based on your personal risk tolerance, time horizon, and goals – and revisit it regularly.

Important considerations

This article is for informational purposes only and not intended as tax or legal advice. Everyone’s situation is different – especially when it comes to IRA contribution rules, early withdrawal penalties, and tax implications. Please consult your tax or legal professional for guidance tailored to you.