Retirement Withdrawal Order: Which Accounts to Tap First
Learn the optimal order to withdraw from 401(k), IRA, Roth, and taxable accounts to minimize taxes in retirement.
The common starting order is taxable accounts first, then tax-deferred 401(k) and IRA money, then Roth last — adjusted each year to fill low tax brackets and avoid a giant RMD later.
What you'll walk away with
Skim these first — then dig into the details below.
- 1Withdrawal order affects how long your money lasts and how much you pay in taxes.
- 2Taxable accounts first, then tax-deferred, then Roth is a common starting framework.
- 3Required Minimum Distributions (RMDs) force withdrawals from traditional accounts at 73.
- 4Roth conversions in low-income years can reduce future RMD tax burdens.
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Saving is one job; unwinding the portfolio tax-efficiently is another. The same $80,000 of spending can generate wildly different tax bills depending on which accounts it comes from.
Model your retirement income before locking in a strategy with the retirement calculator.
The conventional sequence
Most plans start here, then get customized. The logic is to let the most tax-advantaged money compound the longest.
- 1
Spend taxable brokerage assets first, harvesting long-term gains at favorable rates.
- 2
Then draw from tax-deferred 401(k) and traditional IRA balances as ordinary income.
- 3
Leave Roth accounts for last, since they grow tax-free and have no lifetime RMDs.
- 4
Layer Social Security timing on top — delaying to 70 raises your inflation-adjusted benefit.
Fill brackets instead of emptying accounts
A smarter version blends withdrawals each year to use up low tax brackets deliberately rather than spending one account at a time.
- Withdraw traditional money up to the top of a low bracket, even if you do not need it all.
- Cover the rest of your spending from taxable or Roth funds to keep taxable income flat.
- Watch thresholds that create hidden costs: Social Security taxation, IRMAA Medicare surcharges, and ACA subsidy cliffs before 65.
- Understand where the lines sit — see federal tax brackets explained.
RMDs and Roth conversions
At 73, required minimum distributions force money out of traditional accounts whether you need it or not. Large balances can push you into a higher bracket permanently.
The window between retirement and RMD age is the best conversion opportunity most people ever get, because your income is temporarily low.
- Convert traditional dollars to Roth in low-income years, paying tax at today’s rate.
- Convert only up to the top of your target bracket each year.
- Pay conversion taxes from taxable funds so the full amount keeps growing.
- Qualified charitable distributions can satisfy RMDs without adding taxable income.
Adjust for your situation
Two details override the general framework more often than anything else: retiring early, and having an unbalanced mix of account types.
- Retiring before 59½: use taxable funds, Roth contributions, a Roth conversion ladder, or a SEPP plan to avoid the 10% penalty.
- Buying ACA coverage: your withdrawals set your income, which sets your subsidy.
- Heavy traditional balances: start conversions earlier and more aggressively.
- Heirs: Roth assets are generally the best money to leave behind — see Roth vs traditional IRA.
Disclaimer: This page includes AI-assisted educational content reviewed for general accuracy. It is not personalized financial, tax, or legal advice. Verify numbers with a qualified professional and our editorial standards.
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