Liquidating assets before
Because these decisions can be complex, it is wise to seek qualified tax and legal advice.The Income Tax Perspective From an income tax perspective, you want to create the most tax-efficient income you can from the various resources you have.
You also may have earmarked certain taxable money for retirement, such as stock you inherited from a deceased relative.
Taxable savings enjoy what is known as a step-up in basis when they are passed to a beneficiary.
Essentially that means your beneficiary potentially can sell an inherited asset and owe little or no income tax on it whatsoever.
There’s no major tax advantage or disadvantage to taking withdrawals from a traditional IRA or a 401(k) account first; they are treated the same for income tax purposes.
However, investment performance will be a major deciding factor.