What is the best order to withdraw from my 401k, Roth IRA, and taxable accounts in retirement?
Last reviewed: July 2026
The conventional best order to withdraw in retirement is taxable accounts first, tax-deferred accounts like a 401(k) or traditional IRA second, and Roth accounts last, because this sequence lets your tax-advantaged money keep growing the longest. But the conventional order is a starting point, not a rule. The smarter strategy fills up low tax brackets with tax-deferred withdrawals in your early retirement years, manages around required distributions, and watches Medicare premium thresholds. A thoughtful drawdown plan can add years to how long your money lasts and cut your lifetime tax bill significantly.
On This Page
- Key Takeaways
- What is the conventional withdrawal order, and why?
- Why does "filling up tax brackets" beat the simple order?
- How does drawdown order affect Social Security and Medicare?
- How do you build a sustainable drawdown plan?
- Related Topics Worth Reading
- Frequently Asked Questions
- Turning your savings into income that lasts
- Disclosures
Key Takeaways
- The traditional drawdown order is taxable first, tax-deferred second, Roth last, which keeps tax-advantaged growth going longest.
- The smarter approach blends the order, drawing some tax-deferred money early to fill low brackets before RMDs begin at age 73.
- Withdrawal sequencing affects how much of your Social Security is taxed and whether you cross a Medicare IRMAA threshold.
- A sustainable withdrawal rate, often discussed around the 4% guideline, keeps the plan from running dry.
About the Author: Jeff Judge, CFP®, AEP®, ChFC®, CLU® is Managing Partner of Chesapeake Financial Planners in Forest Hill, Maryland. He has built retirement drawdown plans for Harford County and Baltimore-area families since earning his CFP® certification in 2013, by using Chesapeake Financial Planners’ signature process, the R.U.D.D.E.R. method™. Jeff's view: the account you pull from each year is a tax decision as much as a cash-flow decision, and retirees who treat it that way routinely keep tens of thousands more over a retirement.
What is the conventional withdrawal order, and why?
The conventional withdrawal order is to spend taxable accounts first, then tax-deferred accounts, and Roth accounts last, because each step preserves tax-advantaged growth for as long as possible. The logic is sound as a default, even if it is not always optimal.
You start with taxable brokerage accounts because they are already taxed as you go, and spending them first lets your tax-deferred and Roth accounts keep compounding sheltered from tax. You move to tax-deferred accounts, a 401(k) or traditional IRA, next, paying ordinary income tax on those withdrawals. You save Roth accounts for last because they grow tax-free and come out tax-free, so the longer they stay invested, the more that tax-free growth compounds, and Roth balances also pass to heirs with valuable tax advantages.
This order maximizes the time your sheltered money keeps working. The catch is that following it rigidly can backfire, because leaving large tax-deferred balances untouched until your 70s can create enormous required distributions later, taxed all at once at higher rates. That is why the conventional order is the beginning of the analysis, not the end.
Why does "filling up tax brackets" beat the simple order?
Filling up low tax brackets in your early retirement years beats the simple order because it spreads your tax-deferred withdrawals across more years and lower rates, instead of concentrating them when required distributions hit. The idea is to use the gap between retiring and age 73 strategically.
In those early years your income is often at its lowest, before Social Security and before required distributions. Rather than spending only taxable money and letting your traditional IRA grow untouched, you can intentionally withdraw, or convert to Roth, enough tax-deferred money each year to "fill up" the lower tax brackets without spilling into a higher one. This voluntarily realizes income at low rates now to avoid being forced to realize it at high rates later.
The payoff is twofold: you shrink the future required distributions that would otherwise stack on top of Social Security, and you can shift money into Roth accounts that never face RMDs at all. As Jeff Judge puts it, "The years from retirement to 73 are a tax window that closes quietly, and the retirees who use it deliberately almost always come out ahead of those who simply follow the textbook order."
How does drawdown order affect Social Security and Medicare?
Your drawdown order affects Social Security taxation and Medicare premiums because the withdrawals you choose each year determine your taxable income, which drives both. Two retirees with the same total spending can owe very different taxes based purely on which accounts they tap.
Tax-deferred withdrawals add to your income and can increase how much of your Social Security becomes taxable, up to the 85% maximum, while Roth withdrawals do not count toward that calculation at all. The same logic applies to Medicare: for 2026, an income-related surcharge begins once modified adjusted gross income passes $109,000 for single filers or $218,000 for couples. The Social Security Administration confirms "The standard Part B premium for 2026 is $202.90," and crossing the first IRMAA tier adds another $81.20 per month, so a poorly timed large withdrawal can raise your premiums two years later.
This is where Roth accounts earn their keep beyond tax-free growth: in a year when you need extra cash but are near an IRMAA cliff or a Social Security taxation threshold, drawing from Roth instead of tax-deferred can keep your income under the line. A flexible drawdown plan that blends account types gives you that control, which a rigid order does not. The IRS account-type rules make clear that Roth IRAs have no lifetime RMDs, which is a key reason to preserve them.
How do you build a sustainable drawdown plan?
You build a sustainable drawdown plan by setting a safe withdrawal rate, mapping which accounts you will draw from each year, and adjusting as taxes and markets change. The order is one piece; the rate and the flexibility are the rest.
Work through these steps:
- Set a sustainable withdrawal rate. The widely cited 4% guideline, drawn from research on surviving worst-case market histories, is a reasonable starting reference, though your own number depends on your timeline and flexibility, and the FINRA guidance on managing a retirement portfolio stresses making sure income lasts.
- Map your accounts and project income year by year, identifying the low-bracket years before RMDs where conversions and tax-deferred withdrawals make sense.
- Build in flexibility to draw from Roth in high-income years to stay under Social Security and IRMAA thresholds.
- Reassess annually, because tax law, markets, and your spending all change, and the optimal account to tap can shift from year to year.
This is exactly the work the R.U.D.D.E.R. Method™ is built to carry out. The R.U.D.D.E.R. Method™ is Chesapeake Financial Planners' six-step planning process: Review and Recognize, Uncover and Understand, Design and Develop, Discuss and Decide, Execute and Empower, and Reassess and Refine, and a drawdown plan lives across Execute and Empower and Reassess and Refine, because it must be run and adjusted every year rather than set once.
Related Topics Worth Reading
Drawdown strategy connects to taxes, Social Security, and Medicare. These related topics go deeper.
- How to coordinate Social Security, RMDs, and pension income as one plan. How do I coordinate all my retirement income sources to minimize taxes and maximize income?
- Why early-retirement market losses make withdrawal order even more important. What is sequence of returns risk, and why do the first years of retirement matter most?
- How your income decisions ripple into Medicare premiums. How does my Social Security claiming decision affect my Medicare premiums?
- Using the pre-RMD years to cut your lifetime tax bill. How do you use the years between retirement and RMDs to reduce lifetime taxes?
- The year-by-year calendar for conversions and withdrawals. What is a year-round tax planning calendar for retirees and pre-retirees?
Frequently Asked Questions
What account should I withdraw from first in retirement?
Conventionally, you withdraw from taxable brokerage accounts first, then tax-deferred accounts like a 401(k) or traditional IRA, and Roth accounts last, which preserves tax-advantaged growth longest. However, the optimal approach often blends these, drawing some tax-deferred money in low-income early-retirement years to fill up lower tax brackets and reduce future required distributions. The right order depends on your tax situation, not a fixed rule.
Should I draw down my 401(k) or Roth IRA first?
You should generally draw down your 401(k) before your Roth IRA, because Roth accounts grow tax-free, come out tax-free, and have no required minimum distributions during your lifetime, so they are valuable to preserve. That said, tapping some 401(k) money in low-bracket years can lower future RMDs, and drawing from Roth in a high-income year can keep you under Social Security and Medicare thresholds, so flexibility matters.
How much can I safely withdraw from my retirement savings each year?
A common starting reference is the 4% guideline, which suggests withdrawing about 4% of your initial balance, adjusted for inflation, based on research testing the worst historical market sequences. Your sustainable rate depends on your time horizon, investment mix, and willingness to adjust spending in down years. A flexible plan that can reduce withdrawals during market declines generally supports a higher long-term rate than a rigid one.
How does my withdrawal order affect my taxes?
Your withdrawal order affects your taxes because tax-deferred withdrawals count as ordinary income while Roth withdrawals do not, so which accounts you tap each year determines your taxable income. That income controls how much of your Social Security is taxed and whether you cross a Medicare IRMAA threshold. Blending account types lets you manage your taxable income deliberately rather than letting a rigid order dictate it.
When should I do Roth conversions as part of my drawdown?
The best time for Roth conversions as part of a drawdown plan is usually the low-income years between retiring and age 73, before required distributions and often before Social Security begins. Converting then lets you move pre-tax money to Roth at lower tax rates, reduces future RMDs, and lowers later taxable income, which protects both Social Security taxability and your Medicare premiums. Size conversions to fill, not exceed, your target bracket.
Turning your savings into income that lasts
A retirement income drawdown strategy is far more than picking an account to spend; it is a year-by-year tax plan that decides how long your money lasts and how much you keep. The conventional order is a fine default, but blending it, using low-bracket early years for conversions and tax-deferred withdrawals, and staying flexible around Social Security and Medicare thresholds, is what separates a good plan from a great one. Jeff Judge and the Chesapeake Financial Planners team build and run drawdown plans for retirees across Harford County and the Baltimore metro. Schedule a free fit call at chesapeakefp.com.
Want to go deeper? Our Retirement Income Blueprint Workbook walks through this step by step.
Disclosures
The information provided is for educational purposes only and should not be construed as investment advice. Investment strategies should be tailored to individual circumstances, risk tolerance, and goals. Past performance doesn't guarantee future results. Consult with qualified financial professionals regarding your specific situation.
CFP Board owns the marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the U.S.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
Advisors associated with Chesapeake Financial Planners may be either (1) LPL Financial Registered Representatives offering securities through LPL Financial, Member FINRA and SIPC, and investment advisor representatives offering investment advice through Great Valley Advisor Group; or (2) solely investment advisor representatives offering investment advice through Great Valley Advisor Group and not affiliated with LPL Financial. Great Valley Advisor Group, and Chesapeake Financial Planners are separate entities from LPL Financial.
