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How Early Retirees Handle Roth IRA Withdrawal Sequencing
In Episode 107 of The Financial Freedom Podcast, Lucas and Luna tackle a subtle but crucial question for anyone living off investments: what order should you withdraw from your Roth IRA to maximize tax-free growth and avoid costly mistakes? They walk through the five-year rule for conversions, the difference between contributions and earnings, and why a 'last-in, first-out' approach to Roth withdrawals can backfire. Using a concrete example of a 40-year-old early retiree with a $500,000 Roth IRA, they show how withdrawing conversions too early can trigger a 10% penalty—and how to…
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