Craig Wear, a CFP, explains how to minimize taxes on large taxable brokerage accounts. With million-plus accounts, withdrawal taxes can be substantial. The key is balancing what you need now against long-term growth and avoiding drawing down too fast.
And if you have a larger brokerage account of a million or 5 or 10 or 20, those numbers of taxable income can be really big. And so it's not so much a matter of do I have enough to give me enough income, it's how do I keep Uncle Sam out of my back pocket the best that I can. And of course, along the way with trying to figure out how to do this withdrawal strategy, there's always in the back of your mind, what's the impact on my long term financial health if I take money out of this account? Am I going to draw it down too quickly? Are the investments performing the way that they ought to?
