The FIRE Retirement Withdrawal Sequence That Cuts Your Tax Bill

Lucas and Luna break down a specific retirement withdrawal sequence designed for early retirees aiming to minimize lifetime taxes. Using a hypothetical FIRE couple with a $1.2 million portfolio split across taxable, traditional IRA, and Roth IRA accounts, they walk through a six-step annual withdrawal process: spend taxable dividends first, then sell appreciated taxable assets up to the 0% capital gains bracket, followed by Roth contributions, a Roth conversion ladder for the next year's expenses, traditional IRA withdrawals only if forced, and finally Roth earnings after age 59.5. The episode includes concrete numbers showing how this sequence saved the couple over $8,500 in taxes compared to a naive proportional withdrawal approach. They also discuss the importance of managing the taxable account balance in the years leading up to retirement to fund the first five years before Roth conversions become accessible. A listener support segment is woven into the discussion about the value of ad-free, independent FIRE planning content. #FIRE #FinancialIndependence #EarlyRetirement #TaxStrategy #WithdrawalSequence #RothConversionLadder #CapitalGains #TaxBracketManagement #PortfolioWithdrawal #RetirementTaxes #FIREPlanning #TaxEfficient #RothIRA #TraditionalIRA #TaxableAccount #FexingoBusiness #BusinessPodcast #Finance Keep every episode free: buymeacoffee.com/fexingo