User:Fyre4ce/Retirement draw-down priority

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Investors are faced with a variety of choices on where to invest their money; for example, a taxable account, a 401(k), or an IRA. Knowing which accounts to invest in first will maximize return with a minimum of taxes. Prioritizing investments indicates the appropriate order in which investments go into these accounts.

Take care to ensure that any investment priority decision aligns with your Investment Policy Statement.

Funding priority
Here is a general account funding priority that often works well for many people (not all points will apply to everyone). Refer to Figure 1.

Spending priority
Table 1 describes the rationale for investing in the order previously described.

401(k) plans with high cost funds
Many company plans contain high-cost funds which make them unattractive. If you have such a plan, look for one or two index funds or a bond fund that can be used. If your company offers matching funds up to a certain contribution level, it is always wise to use the company plan. If there is no match, the power of tax-deferred compounding and automatic contributions still favors using the plan with limited contributions.

Also, if you leave your current employer you will most likely be able to rollover the assets in your poor-quality company plan to either a better company plan, or to an IRA.