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When you begin taking withdrawals form your 403b IRA Rollover assets, consider tapping into the taxable rollover accounts first. Here’s why:

• Your tax-sheltered 403b rollover should remain tax sheltered as long as possible to continue reaping the benefits of 403b IRA rollover interest compounding on a tax-deferred basis.
• Money that’s withdrawn from a retirement plan such as your 403b IRA, regular IRA, or IRA rollover is taxed as ordinary income. The rate could be as much as 39.6 percent, depending on your tax bracket rollover.
• Taxable IRA investments are taxed at a long-term capital gains rate of only 20 percent. That can add up to considerable savings, depending on the tax bracket you’re in.

Withdraw from your IRA investments will have only 7 percent buying power compared to today’s dollars. The reality of economics is that you have to continue to grow your money during retirement by keeping some of it invested in equity funds. These funds may have more volatility in the short run, but in the long run stock funds have consistently outpaced inflation.

Retirement Strategy Summary

1. Review your retirement portfolio periodically, taking into account any changes in goals, lifestyle, or personal financial situations. A frequent assessment will help determine if you’re still on track, based on your original projections, or if you need to make modifications.
2. Make sure that your portfolio is adjusted for protection along with continued growth. That means it must be diversified with bond funds, cash instruments, and conservative growth funds.

In case of emergency, keep cash reserves that can be immediately liquidated such as bank savings accounts, money market accounts, or short-term CD’s. Having a separate supply of cash means you won’t have to tap into retirement money thereby threaten the balance of your current asset allocation plan.