More than a third of Americans say they want an 'adventurous retirement'
That means understanding your full financial picture, including your income sources, expected benefits, expenses, and how your assets are structured across account types. Without that foundation, it's impossible to build an effective, tax-efficient withdrawal strategy.
Early in retirement, before Social Security or pension income kicks in, you might find yourself in an unusually low tax bracket. "It could be the lowest bracket that you've ever been in in your entire life," Smith said.
That could make it a smart time to draw from traditional IRAs or 401(k)s before reaching the required minimum distribution (RMD) age, allowing you to "fill up" lower tax brackets and avoid higher taxes later.
Once guaranteed income begins, your strategy may shift. Tapping brokerage accounts could be more efficient since long-term capital gains are often taxed at 15% or even 0% for lower earners. For 2024, Smith noted, single filers earning under $48,000 and married couples earning under $96,000 may qualify for the 0% capital gains rate.
Advisers can help you plan a dynamic retirement
Creating a tax-efficient withdrawal plan is just one part of the retirement equation. Selecting the right income strategy, whether it's the 4% rule, bucket planning, annuities, or a hybrid approach, is equally critical.
This is where professional help comes in.
"I think it's imperative that people absolutely consider working with a professional," Smith said. "This is not just an investment management game anymore. This is holistic financial planning, because if it has a dollar sign, this is going to be important for you to try to figure out."
Smith encouraged retirees to ask the right questions when choosing a financial adviser:
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"Are you a fiduciary?"
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"How much is it going to cost, total?"
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"What happens to me if something happens to you?"
Ultimately, the goal is to turn your life savings into a reliable, tax-smart retirement income stream. "As you retire, you have this wealth that you've spent a lifetime building," Smith said. "Now it's your job not to keep saving it, but to know: How do I draw that down? Where do I pull the money? How do I pull the money? When, and how much?"
Smith reflected on how his own unexpected path from wilderness emergency medicine to financial planning helped him learn key lessons.
"There was a time in my life when I was seriously considering becoming a mountain guide," he said.
That training was rigorous, with mornings in the lab and afternoons in hands-on fieldwork. But Smith said he learned to "plan for the worst, hope for the best, and don't be disappointed with averages."
That philosophy carries over to retirement planning.
"We were big on planning your work and working your plan," Smith said. "These are not set-them-on-the-shelf-and-forget-about-them sorts of plans. These are living, breathing documents that you go back to."
And most importantly, he continued, "Don’t just build the plan — test it, because what looks good on paper, what looks good in a classroom doesn't always work on the side of a mountain when it's 10 degrees below zero."
Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service.
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