How do you coordinate 401(k), IRA, and Roth strategies for someone planning to retire in 5 years?
5-year retirement planning requires careful coordination:
- 401(k) optimization: Maximize final years of high-income contributions
- Roth conversion strategy: Convert traditional IRA funds during potentially lower-income retirement years
- Asset allocation: Shift to more conservative allocation as retirement approaches
- Withdrawal sequencing: Plan optimal order of account withdrawals to minimize taxes
Range creates a comprehensive retirement withdrawal strategy that considers:
- Current tax rates vs. expected retirement rates
- Required minimum distributions starting at age 73
- Social Security timing optimization
- Healthcare cost planning
Sources: Advanced Retirement Planning Strategies for High-Income Earners