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Graybar Electric Blueprint for Tax-Efficient IRA Withdrawals

“Graybar Electric employees who work with a legal or tax advisor to create a structured drawdown strategy—aligning withdrawal sequencing with projected income needs and anticipated tax law changes—can help mitigate their lifetime tax burden.”— Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

“By working with a legal or tax advisor to thoughtfully sequence withdrawals from taxable, tax-deferred, and tax-free accounts—and incorporate Roth conversions in low-income years—Graybar Electric employees can help mitigate their retirement tax burden.”— Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

Tax-efficient drawdown strategies for retirement savings
Managing required minimum distributions to help control taxes
Optimal asset location techniques for after-tax returns

Although taxes can erode a sizable portion of retirement assets, Graybar Electric employees can benefit from a systematic strategy known as tax-efficient drawdowns to help preserve more of their savings.

There are distinct tax treatments for different retirement savings vehicles—tax-deferred accounts (such as traditional IRAs and 401ks), tax-free accounts (like Roth IRAs), and taxable brokerage accounts. Taking funds from the wrong bucket at the wrong time may trigger unnecessary taxes, push income into higher brackets, or even increase Medicare Part B and D premiums. Crafting a withdrawal sequence that aligns account types with income needs and anticipated tax liabilities can help to optimize post-career income.

Important Takeaways

- A planned withdrawal order can help extend the longevity of your retirement portfolio.

- Withdrawal timing and tax impact differ across tax-deferred, tax-free, and taxable accounts.

- Capital gains management and required minimum distribution (RMD) planning play a pivotal role in overall tax obligations.

- Personalized strategies—based on income profiles, asset allocations, and health considerations—help align outcomes to individual needs.

What a Withdrawal Sequence Means

A retirement drawdown involves withdrawing money from your investment and retirement accounts—such as taxable brokerage accounts, 401ks, Roth IRAs, and traditional IRAs—to fund living expenses after work ends. Research indicates that a systematic hierarchy of withdrawals from these accounts, based on their tax treatment, can extend retirement savings by three years or more. ¹

Tyson Mavar, a financial advisor with Wealth Enhancement, explains the thinking behind this strategy. When retirees withdraw funds from taxable accounts, taxes apply only to capital gains, which are generally taxed at favorable rates (0%, 15%, or 20%, depending on total income). Withdrawing these funds while still in your earning years could help mitigate your overall tax burden. For their part, funds drawn from tax-deferred accounts (such as 401ks and traditional IRAs), are typically taxed at ordinary income tax rates—so these withdrawals may make more sense during lower earning years. Finally, Roth IRAs allow for tax-free withdrawals. Delaying withdrawals from these tax-favored accounts gives them more time to grow tax-free.

To determine the best withdrawal sequencing for your needs, it's important for Graybar Electric employees to consider their individual circumstances. For example, partial Roth IRA distributions after the five-year holding period may be advantageous in early retirement years if your taxable income is particularly low and could help to manage future RMD requirements.

Managing the Necessary Minimum Distributions

Current IRS rules require account owners to begin RMDs from employer-sponsored plans and traditional IRAs by April 1 of the year after they turn 73 if they were born between 1951 and 1959. For those born in 1960 or later, RMDs start at 75. If not managed carefully, these mandatory distributions—treated as ordinary income—can raise annual tax bills for Graybar Electric employees.

In the decade leading up to RMD age, Mavar often advises clients to consider Roth conversions. Because Roth IRAs do not mandate RMDs, shifting assets from a traditional IRA to a Roth IRA allows your money to grow tax-free. That said, the conversion itself incurs income tax at current rates. Strategic timing of conversions in low-income years may help control taxable income and may lower total lifetime taxes.

Optimizing Asset Placement

Asset positioning—placing investments in the most tax-advantageous accounts—is key to efficient drawdowns. Interest-generating investments (like bonds, actively managed mutual funds, and real estate investment trusts) often produce income taxed at ordinary rates, making them ideal candidates for Roth or tax-deferred accounts. Conversely, tax-efficient holdings (such as municipal bond funds and broad market index funds) can be held in taxable accounts, where favorable dividend and long-term capital gains rates apply.

Customization and Comprehensive Planning

No single drawdown plan fits every retiree. A thorough strategy considers factors like current and future income needs, Social Security claiming tactics, medical expenses, legacy goals, and potential tax law changes. Incorporating these elements into a cohesive plan can position Graybar Electric employees to preserve assets for lifelong income and intergenerational wealth transfer.

At Wealth Enhancement, Tyson Mavar and his team specialize in designing customized withdrawal plans. Leveraging their deep knowledge of tax law, investment management, and retirement income planning, they guide clients through complex choices—such as adjusting withdrawals to mitigate Medicare surcharges and evaluating Roth conversions against market conditions.

In Conclusion

After a career of diligent saving, you deserve a retirement plan that helps you keep more after-tax income. When thoughtfully designed and personalized, tax-efficient drawdowns can help make funds last longer. Working with an experienced advisor to navigate capital gains tax management, RMD rules, account hierarchies, and evolving tax laws can yield real savings and greater financial flexibility.

Learn how to navigate RMD implications, manage taxable income, and preserve lifetime savings through strategies like qualified charitable distributions, Roth conversions, and optimized drawdown sequencing. It’s akin to conducting a symphony: you start with the soft strings of taxable brokerage gains, introduce the warmer woodwinds of tax-deferred accounts, let your Roth “brass” soar tax-free, and weave in timely “Roth conversion” solos before the RMD percussion begins—making sure every instrument complements the ensemble without overpowering it.

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Sources:

1. Financial Analysts Journal. ' Tax-Efficient Withdrawal Strategies ,' by Kirsten A. Cook, William Meyer & William Reichenstein. 28 Dec. 2018.

Other Resources:

1. Sumutka, Alan R., Andrew M. Sumutka, and Lewis W. Coopersmith. “Tax-Efficient Retirement Withdrawal Planning Using a Comprehensive Tax Model.” Journal of Financial Planning , vol. 25, no. 4, Apr. 2012, pp. 41–52.

2. Neufeld, Dorothy. “How Required Minimum Distributions Impact Your Traditional IRA Balance.” Investopedia , 14 Apr. 2025, https://www.investopedia.com/required-minimum-distributions-impact-traditional-ira-balance-11711080 .

3. Vanguard Group. “Asset Location Can Lead to Lower Taxes.” Vanguard , Aug. 2024, https://investor.vanguard.com/investment-stewardship/asset-location .

4. Morningstar Editors. “How to Spend From Your Portfolio Tax-Efficiently in Retirement.” Morningstar , Nov. 2024, https://www.morningstar.com/articles/2024/11/how-to-spend-tax-efficiently .

5. Kitces, Michael. “Navigating Income Harvesting Strategies: Harvesting (0 %) Capital Gains Vs. Partial Roth Conversions.” Kitces.com , 22 July 2020, https://www.kitces.com/blog/navigating-income-harvesting-strategies-harvesting-vs-roth-conversions .

What steps must an employee take to ensure they accurately calculate their pension benefits when planning for retirement under the Electricians Pension Plan, IBEW 995? Employees need to understand the various factors that contribute to benefit calculations, including years of service credits, age, and any early retirement reductions. Participants should also familiarize themselves with the formulas outlined in the plan regarding Normal Retirement and Early Retirement benefits.

Employees under the Electricians Pension Plan, IBEW 995 can ensure accurate pension calculations by reviewing the plan's formulas, which consider factors like service credits, age, and early retirement reductions. The plan provides specific calculation methods for Normal and Early Retirement pensions, so employees should refer to their accrued credits and apply the appropriate formula based on the years of service to get a precise benefit estimate(Electricians_Pension_Pl…).

How does the Electricians Pension Plan, IBEW 995, treat periods of active service compared to breaks in service when determining eligibility for pension benefits? Employees should be aware that their length of service is critical to establishing eligibility, and any periods identified as breaks in service may impact their pension status. Understanding the definition and implications of breaks in service can be vital for maximizing retirement benefits.

Service periods under the Electricians Pension Plan, IBEW 995 are critical for pension eligibility and accrual. Breaks in service, defined as periods where an employee is not credited with at least 250 hours in a plan year, can disrupt benefit accrual and participation. However, the plan provides grace periods for specific situations such as disability or maternity, preventing these gaps from affecting eligibility(Electricians_Pension_Pl…).

What are the implications of returning to work after starting to receive benefits under the Electricians Pension Plan, IBEW 995, and how can it affect ongoing pension payments? It's important for employees to recognize the conditions classified as "Disqualifying Employment" that can lead to suspending their pension benefits. Knowing how working while receiving benefits influences the plan can help retirees make informed decisions about their post-retirement employment.

Returning to work after starting to receive benefits under the Electricians Pension Plan, IBEW 995 can result in a suspension of benefits if the work qualifies as "Disqualifying Employment." Employees should check the plan’s definitions to see if their employment will affect their pension payments. Generally, working over 40 hours per month in covered employment or similar trades can trigger a suspension(Electricians_Pension_Pl…).

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Spousal status significantly affects the distribution of benefits under the Electricians Pension Plan, IBEW 995. If an employee is married, the default pension option is the Joint and Survivor Annuity, which provides a continued payout to the spouse upon the participant’s death. The plan also outlines the necessary waivers and consents required for changing these benefits based on marital status(Electricians_Pension_Pl…).

How do changes in the Internal Revenue Service (IRS) regulations affect the contribution limits and benefit payouts related to the Electricians Pension Plan, IBEW 995? Employees should keep informed on the most current IRS guidelines, as they directly influence how benefits are calculated and dispersed. Awareness of IRS limits can prevent unexpected tax penalties and ensure compliance with pension law.

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What documentation is required for employees to maintain their eligibility for pension benefits under the Electricians Pension Plan, IBEW 995, especially after significant life events such as marriage, divorce, or disability? Employees must notify the plan office of life changes and provide necessary documentation. Understanding what these documents are and how they should be submitted is crucial for maintaining eligibility and accessing benefits.

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If a claim for benefits is denied, the Electricians Pension Plan, IBEW 995 provides an appeals process. Employees must file a written appeal within 60 days of receiving the denial notice. The appeal should include any relevant documentation, and employees should follow the timeline and procedures outlined in the plan to ensure proper consideration of their case(Electricians_Pension_Pl…).

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Employees concerned about their employer meeting its contribution obligations to the Electricians Pension Plan, IBEW 995 can contact the plan’s administrative office for verification. The plan allows participants to access contribution reports to confirm that employers are properly crediting their accounts(Electricians_Pension_Pl…).

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The Electricians Pension Plan, IBEW 995 offers various resources to help employees understand their retirement options. These include the plan’s summary description, workshops, and individual consultations with plan administrators. Employees should make use of these tools to gain a clear understanding of their pension and plan effectively(Electricians_Pension_Pl…).

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For additional questions or clarification regarding the Electricians Pension Plan, IBEW 995, employees can contact the plan's administrative office at the provided phone number or address. The office offers support for all queries related to pension benefits, eligibility, and documentation(Electricians_Pension_Pl…).