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Retirement Withdrawal Order Optimizer (2026)

The order you tap Traditional, Roth, and taxable accounts has a bigger tax impact than the rate you earned. Compare three strategies side by side and see exactly how much lifetime tax you can save by sequencing withdrawals correctly.

Your Retirement Profile

Projects to age 92

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$0$3,000,000
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$0$1,000,000
$
$0$1,000,000
%

% of taxable balance that is your original investment (not unrealized gain)

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$0$60,000

Annual benefit — use $0 if not yet collecting

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$0$60,000
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$0$100,000

Annual pension, annuity, or other guaranteed income

Strategy Comparison — 30-Year Projection

Traditional First
Lifetime federal tax$48k
Final portfolio$1.49M
Portfolio lasts untilFull horizon
Roth First
Lifetime federal tax$109k
Final portfolio$824k
Portfolio lasts untilFull horizon
Tax-OptimalRecommended
Lifetime federal tax$48k
Final portfolio$1.49M
Portfolio lasts untilFull horizon

Total portfolio value (traditional + Roth + taxable) for each strategy over time. Teal line (Tax-Optimal) typically ends highest — lower taxes leave more money compounding.

Why Withdrawal Order Matters More Than You Think

Most retirement planning focuses on how much to save and what return to earn — but the order you withdraw from your accounts can have a larger impact on your lifetime tax bill than either factor. Withdrawing from the wrong bucket at the wrong time can push you into higher brackets, trigger the Social Security tax torpedo, cross an IRMAA Medicare cliff, or accelerate required minimum distributions in your 80s.

The 'Traditional First' strategy — drawing from tax-deferred accounts before Roth — is the default for many retirees because it preserves tax-free Roth growth. But it often produces high ordinary income in the early retirement years, precisely when you have the most flexibility to control your taxable income.

The 'Roth First' approach preserves traditional IRA balances to compound longer before RMDs begin at age 73. This can reduce forced taxable withdrawals later, but it depletes your most tax-flexible asset early and often results in large traditional balances when RMDs eventually hit.

The Tax-Optimal approach fills tax brackets intelligently each year: take just enough from the traditional IRA to fill the 12% bracket (the standard deduction shields the first $32,200 for MFJ filers in 2026), harvest capital gains from taxable accounts at the 0% rate while you remain in that bracket, then cover remaining spending with Roth withdrawals — which generate no taxable income. This minimizes ordinary income taxes, preserves Roth assets longer, and leverages the 0% LTCG bracket most retirees overlook.

None of these strategies is universally best. Pension income, Social Security timing, healthcare costs, state tax rules, and the relative size of each account type all shift the optimal approach year by year. The calculator models all three strategies across your planning horizon so you can see the real tax impact of each decision.

5 Rules of Tax-Efficient Withdrawal Sequencing

1

Always satisfy RMDs first

Required Minimum Distributions from traditional IRAs and 401(k)s are mandatory starting at age 73. Missing an RMD triggers a 25% penalty on the amount not taken. RMDs are fully taxable and count toward provisional income for Social Security taxation, so large traditional balances in your 70s and 80s can create a compounding tax problem. Model RMDs early — they will eventually force income into higher brackets whether you plan for them or not.

2

Exploit the 0% long-term capital gains bracket

If your taxable income stays within the 12% ordinary income bracket, long-term capital gains and qualified dividends are taxed at 0% federally. In 2026, this means a married couple can have up to $100,800 in taxable income and owe nothing on capital gains. In retirement, if you manage your traditional IRA withdrawals correctly, you can sell appreciated taxable brokerage positions with zero federal capital gains tax — one of the most underused opportunities in retirement income planning.

3

Use the standard deduction as a tax-free withdrawal floor

In 2026, the standard deduction is $16,100 for single filers and $32,200 for MFJ — plus an additional $6,000 per person at age 65+. This means a married couple where both are 65+ can take approximately $44,200 from traditional accounts with zero federal income tax owed. Every dollar of this 'free space' used for traditional withdrawals reduces the account balance subject to future RMDs.

4

Watch Social Security provisional income carefully

Provisional income (AGI + tax-exempt interest + 50% of SS benefit) determines how much Social Security becomes taxable. Traditional IRA withdrawals directly raise provisional income. Once you cross the $32,000 (MFJ) or $25,000 (single) threshold, each additional dollar of traditional income effectively costs 1.85x in taxes due to the torpedo effect. Roth withdrawals, by contrast, don't count toward provisional income at all.

5

Consider IRMAA impact two years in advance

Medicare IRMAA surcharges are based on income from two years prior. A single year of high traditional IRA withdrawals can trigger $1,000–$5,000+ in additional annual Medicare premiums two years later — and that surcharge persists until the relevant income year rolls out of the lookback window. If you're planning large withdrawals or Roth conversions, check the IRMAA impact alongside income tax before deciding how much to take in any given year.

Model your Roth conversion window first: The years between retirement and age 73 are the ideal time to convert traditional IRA money to Roth, reducing the balance subject to future RMDs. Use the Roth Conversion Ladder Planner to find your optimal conversion amount each year.

Watch the Social Security torpedo: Traditional IRA withdrawals raise provisional income and can push your effective marginal rate to 40%+ by triggering SS taxation. Use the Social Security Tax Torpedo Calculator before deciding how much traditional income to take in any year.

Check your IRMAA exposure: Large withdrawals in any single year can trigger Medicare surcharges two years later. Use the Medicare IRMAA Calculator to see exactly how much headroom you have before the next cliff.

Read: The Retirement Withdrawal Order Strategy Guide →

Frequently Asked Questions

The generally optimal sequence is: (1) satisfy RMDs from traditional accounts — these are mandatory at age 73+, (2) harvest capital gains from taxable accounts while your taxable income keeps you in the 0% LTCG bracket, (3) take traditional IRA or 401(k) withdrawals to fill the 12% bracket, then (4) cover remaining spending from Roth — completely tax-free. This sequencing minimizes ordinary income taxes, leverages the 0% capital gains rate, and lets tax-free Roth money compound as long as possible.
For most retirees in the early retirement years — before RMDs begin at 73 — withdrawing from the traditional IRA up to the top of the 12% tax bracket and covering the rest from Roth tends to minimize lifetime taxes. This keeps taxable income low enough for 0% capital gains rates and avoids the Social Security tax torpedo. That said, the right answer depends on your specific account balances, income sources, and tax situation. The calculator above models both strategies for your numbers.
Starting at age 73, the IRS requires annual minimum withdrawals from traditional IRAs and 401(k)s. The amount is your year-end balance divided by an IRS life expectancy factor that decreases each year, meaning the mandatory distribution percentage rises with age. RMDs are fully taxable as ordinary income and count toward provisional income for Social Security taxation. This is why large traditional IRA balances become a tax problem in the 70s and 80s — and why reducing that balance through strategic withdrawals or Roth conversions before RMDs begin is so valuable.
No. Qualified Roth IRA distributions — from accounts at least 5 years old, taken after age 59½ — are completely tax-free at the federal level. They don't count toward adjusted gross income, don't count toward provisional income for Social Security taxation, and don't affect IRMAA Medicare surcharges. This makes Roth withdrawals uniquely powerful for managing taxable income in retirement, especially in years when you're near a tax bracket, SS threshold, or IRMAA cliff.
Federal long-term capital gains (on assets held over one year) are taxed at 0% if your taxable income falls at or below the top of the 12% ordinary income bracket — $50,400 for single filers and $100,800 for MFJ filers in 2026. In retirement, if you keep your traditional IRA withdrawals low enough to stay in the 12% bracket, you can sell appreciated taxable brokerage positions with no federal capital gains tax. This opportunity is available to many middle-income retirees and is one of the most valuable — and least used — tax strategies in retirement.
Social Security benefits are taxed based on 'provisional income' — your AGI plus tax-exempt interest plus 50% of your SS benefit. Traditional IRA withdrawals directly increase provisional income, which can cause up to 85% of SS to become taxable. This creates an effective marginal tax rate of 40%+ in the 'torpedo zone' between the lower and upper provisional income thresholds. Roth withdrawals don't count toward provisional income, so substituting Roth for traditional income can keep you below the SS taxation thresholds entirely.
Yes, especially if your income is near the IRMAA thresholds — $109,000 for single filers and $218,000 for MFJ in 2026. IRMAA surcharges are based on income from two years prior, and crossing a cliff can cost $1,000–$5,000+ per person annually in additional Medicare Part B and Part D premiums. If you're planning large traditional IRA withdrawals or Roth conversions in any year, check the IRMAA impact before acting. One extra dollar of income over a threshold can trigger thousands in surcharges that persist for two years.