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How does negative cash flow affect funds?

If a client's expenses exceed income causing negative cash flow, the negative cash flow is covered by assets in the following order as distributions from accounts:

  1. Cash accounts such as checking and savings
  2. Taxable accounts such as brokerage accounts
  3. Tax deferred accounts such as IRA's and 401(k)'s
  4. Tax free accounts such as Roth IRA's


  1. Accounts earmarked to goals that start before retirement
  2. Accounts earmarked to retirement
  3. Accounts earmarked to goals that start after retirement
  4. Unearmarked accounts
  5. Emergency fund accounts