Use your taxable savings first
One of the main benefits of saving through your employer-sponsored retirement plan is the potential for your money to grow tax-deferred, and this continues after you retire. As you withdraw money to fund your retirement, the savings remaining in your account is still tax-deferred; hence, it makes sense to leave this money in a tax-deferred account as long as possible so you can enjoy this valuable benefit.
If you have any money saved or assets parked in taxable vehicles like brokerage accounts, certificates of deposit, money market accounts or savings accounts, it may serve you best to begin drawing down these sources first and leave your tax-advantaged savings like retirement plans and IRAs alone until you have depleted all your taxable sources.1
1 Certificates of deposit are insured by the FDIC for up to $250,000 per depositor and offer a fixed rate of return, whereas both the principal and yield of bonds and stocks will fluctuate with market conditions.
