That said, some situations call for a different approach. Carlo Panaccione, president of Navigation Group, a wealth management firm in Redwood Shores, Calif., says some of his clients have shifted funds out of an IRA to take advantage of a time when they were in a lower tax bracket than might be the case in the future.
"If you have everything in an IRA and you're in a low tax bracket, you should shift (some) over because if you get into an emergency and need a lump sum, you don't want to spike yourself into a higher tax bracket," he says.
Taking Social Security
Seniors can claim Social Security benefits starting at age 62, but those benefits are reduced until the senior reaches the so-called full retirement age, based on his or her year of birth.
Seniors who are unemployed or retired, either by choice or default, may want to collect Social Security as soon as they're eligible. Tepper says that's a good strategy if the senior's investments can earn an after-tax return of at least 3 percent per year. Again, the idea is to keep more money invested for future growth.
Seniors who are working may want to delay Social Security because their benefit may be reduced, depending on their current age and income, until they reach full retirement age. (The Social Security Administration website offers more information about the effects of income and age on Social Security benefits.)
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