In today's episode, I'm going to be talking about a bridge account. Yeah, you heard that correctly, a bridge account, which is not an official technical term that if you look up, hey, I want to open a bridge account at Charles Schwab or TD Ameritrade or Fidelity, nothing will come up. And the reason for that is it's a fancy name for a taxable account or a brokerage account, which is essentially this is the account for a lot of

clients of mine that they will use before they retire if retirement is, for example, officially

at 65, my clients often retire early, call it between 55 to 65 on average, and let's assume

they're retiring at 58. Well, before 59 and a half, you don't want to

have to pull from those assets that are in an IRA or 401k or Roth IRA and have to pay taxes

and additional penalties. So this is where that bridge account comes into play. In addition,

let's assume you're 62 and you're retiring. You're already, where should I pull assets from first? Well, if you've been listening to the podcast for some time, you know the Roth IRA is one of my favorite accounts, but we want to touch it last because we want it to keep compounding and growing tax-free forever. Your IRA, yes, it's a helpful account because you've been getting a deduction for all these years.

The 401K has now maybe moved to an IRA.

Well, now what I want you to think about is if we're pulling from our IRA, what's happening

is now we're realizing income.

It's not a bad thing, but that might mean we're going to have to pull more income and pay more

taxes.

So what I often look at is this bridge account. This is known as a joint account, a brokerage account, a taxable account.

It's all a very fancy name for the same thing, which is these are dollars that you put in. You don't

get a special tax benefit for it. However, there's no taxes, additional taxes, should I say, or penalties when

you pull from this account. So a bridge account is essentially bridging the gap between when

you should really start pulling from your retirement accounts to make sure you're optimizing

your investments and tax strategy. So a little bit of a longer intro there, but obviously I'm in

love with early retirement and a bridge account and it can play a huge bit of a longer intro there, but I obviously, I'm in love with

early retirement and a bridge account and it can play a huge role for a lot of people. And so I want to

talk today about how you should invest that. So before I hop into today's episode topic, once again,

please, if you haven't already, if there's been any guidance that's been helpful so far,

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