Retirement withdrawal-order strategies: which account comes first?

Withdrawal order controls how a remaining cash shortfall is funded after income such as wages, pensions, Social Security, portfolio distributions, and forced RMDs is counted. The strategy changes which account bears the discretionary draw; it does not switch off tax rules or RMD obligations.

The three engine 1.6.0 choices are deliberately narrow so the comparison is understandable and reproducible. They do not include a Roth-first option.

• Taxable-first: use taxable assets for the discretionary shortfall, then tax-deferred assets, then Roth if the first two sources are exhausted.
• Tax-deferred-first: use traditional IRA and other pre-tax assets first, then taxable assets, then Roth.
• Proportional: split the discretionary draw across taxable and tax-deferred balances in proportion to their current balances, with Roth used only after those sources are exhausted.

RMDs are legal minimum distributions, not optional spending choices. The IRS generally requires owners of traditional IRAs and many employer plans to begin annual distributions at the applicable age, and an RMD is generally included in taxable income except for any previously taxed basis.

Engine 1.6.0 therefore removes the required amount from tax-deferred accounts before applying the selected discretionary order. If the RMD and other income already cover spending and taxes, the selected strategy may have little or no discretionary withdrawal to allocate that year.

Consider the same retired household with money in taxable, traditional, and Roth accounts. In a qualitative deterministic comparison, a taxable-first run may realize gains while leaving more pre-tax money for later; a tax-deferred-first run may recognize more ordinary income earlier while reducing the balance exposed to future RMDs; a proportional run spreads those effects across both account types.

Nothing else in that comparison changes: spending, claiming ages, portfolio assumptions, and market-return sequence stay the same. The engine recomputes taxes and the withdrawals needed to pay those taxes together, then reports each strategy's tax path, RMD path, Medicare costs, portfolio balances, and forecast outcomes. This example intentionally gives no numeric winner because no one strategy wins for every household and no deterministic fixture result is being quoted here.

Qualified Roth withdrawals generally do not add taxable income, and Roth IRAs do not require lifetime RMDs for the original owner. Keeping Roth last isolates the choice between taxable and tax-deferred funding while preserving Roth as the final discretionary pool in all three comparisons.

That is an engine design boundary, not a claim that Roth should always be spent last. A future Roth-first or threshold-aware strategy would need to be explicitly designed, versioned, tested, and compared as a separate lever rather than implied by an AI explanation.

Compare more than one output. Lifetime tax can move differently from Medicare premiums, ending assets, annual cash flow, or the size of future RMDs. A strategy that looks favorable on one measure can look less favorable on another, especially when Social Security taxation, capital gains, state tax, or IRMAA enters the path.

RetireGlide's versioned deterministic engine performs every withdrawal, tax, projection, and simulation calculation. AI may propose a strategy input and explain the computed differences, but it never calculates or ranks the outcomes itself; the user confirms any plan input before it is saved.