Example Financial Strategy

• Investment Focus: Invest in stocks and ETFs in a taxable brokerage account for flexibility, even if the tax burden is higher.
• Emergency Fund: Maintain a separate liquid savings for unexpected expenses (3-6 months of expenses).
• Avoid Early Withdrawals from Roth Accounts: Keep Roth IRA contributions accessible but prioritize taxable account investments for flexibility.

Phase 2: Aggressive Roth Investing (Age 59.5 - 65)

• Maximize Roth IRA & Roth 403(b) Contributions: Now that penalty-free withdrawals are available, invest heavily in tax-free growth.
• Continue Investing in Stocks & ETFs: Shift focus to Roth accounts for long-term tax-free compounding.
• Start Rolling Over Roth 403(b) into Roth IRA: If employer allows, move money yearly to avoid RMDs.
• Withdraw as Needed, Tax-Free: Roth IRA and Roth 403(b) contributions can be accessed without penalty.

Phase 3: Retirement & Beyond (Age 65+)

• Continue Rolling Over Roth 403(b) to Roth IRA: Ensure all funds are in Roth IRA to avoid RMDs at 73.
• Tax-Free Withdrawals: Take as needed while letting the balance grow tax-free.
• Optional Stock & Dividend Income: If extra cash is available, invest in dividend-paying stocks for passive income.
• Estate Planning: Ensure Roth IRA is set up for tax-free inheritance to beneficiaries.

Final Takeaways

✔ Prioritize taxable stock investments before 59.5 for withdrawal flexibility.
✔ Aggressively invest in Roth IRA & Roth 403(b) starting at 59.5.
✔ Roll over Roth 403(b) into Roth IRA annually to eliminate RMDs.
✔ Use a combination of tax-free and taxable accounts to optimize flexibility and growth.