Which accounts should you withdraw from first in retirement?
By the RetireGlide Team · June 19, 2026
The textbook withdrawal order — taxable accounts first, traditional IRA/401(k) second, Roth last — is a reasonable default, but for retirees with large pre-tax balances a blended approach usually beats it: drawing some traditional money early (or converting it) to fill low tax brackets, while preserving Roth dollars for late-life and survivor years. Sequencing is worth real money: studies repeatedly find tax-aware ordering adds the equivalent of 0.5–1.0% of annual returns.
Why the textbook order exists
Spending taxable dollars first lets tax-advantaged accounts compound longer, and taxable withdrawals are cheap — you owe tax only on gains, at preferential long-term rates. Roth-last maximizes the most valuable compounding (tax-free) and leaves the kindest asset to heirs. So far, so sensible.
Where it goes wrong
Pure taxable-first can produce absurdly low taxable income in your 60s — wasting standard deductions and low brackets — followed by a tax explosion at RMD age when the untouched traditional balance forces large withdrawals on top of Social Security. The textbook order defers taxes; it doesn't minimize them.
The fix is bracket management: each year, draw (or Roth-convert) enough pre-tax money to use up the low brackets, funding the rest of spending from taxable sources. You pay some tax sooner at low rates to avoid a lot of tax later at high ones — while also managing side effects like ACA subsidies before 65, IRMAA after, and the Social Security tax torpedo in between.
The moving parts, in one list
- Low-bracket years between retirement and Social Security/RMDs — the prime window for pre-tax withdrawals and conversions.
- ACA subsidies (pre-65) — extra reported income costs premium credits; sometimes the 'cheap' pre-tax withdrawal isn't.
- Provisional income (post-claiming) — pre-tax withdrawals can drag Social Security into taxation at 1.5–1.85x effective rates.
- IRMAA (post-65) — crossing a MAGI tier raises Medicare premiums two years later.
- Survivor filing status — a widowed spouse hits higher brackets on similar income; pre-paying tax at joint rates is often a gift to the survivor.
- Heirs — traditional IRAs saddle heirs with a 10-year taxable drawdown; Roth and step-up-basis taxable assets are far kinder.
This is a modeling problem
No rule of thumb balances six interacting constraints across 30 years — but a year-by-year, tax-aware simulation does it directly. Compare orderings against your actual accounts and watch lifetime taxes, IRMAA years, and ending balances move. The right order isn't a doctrine; it's an output.
Frequently asked questions
- Should I ever spend Roth money early?
- Occasionally, tactically — a Roth withdrawal can cap a year's taxable income below an IRMAA tier or ACA cliff. As a routine funding source, spending Roth early usually squanders its best properties: tax-free compounding and survivor/heir value.
- What's the biggest sequencing mistake?
- Deferring all pre-tax withdrawals until RMDs force them — wasting a decade of low brackets and then paying peak rates on the pile. The second biggest: ignoring how withdrawals interact with ACA subsidies and IRMAA thresholds.
- Does withdrawal order matter if all my money is in a 401(k)?
- Order matters less, but timing still matters a lot: filling low brackets before Social Security begins, and considering Roth conversions in those years, can still meaningfully cut lifetime taxes.
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Sources
RetireGlide is an educational modeling tool, not an investment, tax, or legal adviser. Numbers that change annually (tax thresholds, premiums, benefit formulas) are approximate — always verify against the official sources above. Read our full disclaimer.