Danny takes a look at being tax efficient using diversification of savings over several kinds of buckets, including currently taxed accounts like bank savings and brokerage accounts, tax deferred accounts like traditional IRAs and 401Ks, and tax free accounts like a Roth. Having all of these available can help you manage your income by strategizing from which accounts you pay taxes from, as well as doing Roth conversions properly to avoid a huge tax bill all at once.