Which retirement account should I withdraw from first?

Retirement Withdrawal Strategy

Which Retirement Account Should I Withdraw From First?

This is one of the most important questions you can ask about your retirement and one of the most valuable services we provide. There is no one-size-fits-all answer. The appropriate sequence for you depends on factors such as your unique needs and goals, combined with your age, tax bracket, Social Security timing, and more. It’s more than simply choosing which account to use first; the real goal is to build a coordinated strategy that draws on different account types in the right order, at the right time, for your specific situation.

Retirement Withdrawal Strategy - One of the Most Important Pieces of Your Retirement

Knowing which account to draw from first, and when, can be the difference between the retirement you envision and one that potentially costs you significant amounts in taxes.

Most people spend decades building retirement savings across a mix of accounts: a taxable brokerage account, a 401(k) or traditional IRA, and often a Roth IRA. Far less time is spent thinking about how to draw that money back out. Yet the order in which you withdraw from those accounts has a direct, often significant impact on your taxes, your Medicare premiums, how much of your Social Security benefit is taxed, and what you ultimately leave behind for your family.

This is one of the most valuable and sometimes overlooked conversations in retirement planning. At RetireRight, withdrawal sequencing is a core part of how we help Iowa and Midwest families turn their savings into a retirement income strategy that works for their specific situation.

Why the Order You Withdraw Matters

Every account you hold has a different job to do. A taxable brokerage account offers flexibility and no required withdrawals. A traditional IRA or 401(k) grows tax-deferred but is taxed as ordinary income when you take it out. A Roth account grows and withdraws completely tax-free. Treating these as one interchangeable pile of money, rather than three distinct tools, is one of the most common and potentially costly mistakes we see.

The right sequence is never the same for two families, even when their account balances look identical. It depends on your tax bracket, your Social Security timing, your health, and what you want to leave behind. Getting it right for your personal situation requires a coordinated, multi-year plan, not a single decision made the week you retire.

What a Withdrawal Strategy Has to Account For

A sound withdrawal strategy weighs five interconnected factors:

Taxes — Different accounts create different tax outcomes each year. The wrong sequence can push you into a higher bracket unnecessarily.

Future RMDs — Required minimum distributions begin at age 73. Letting a traditional IRA grow untouched for too long can create an outsized, fully taxable RMD down the road.

Medicare premiums — Income from withdrawals can trigger IRMAA surcharges on Medicare Part B and Part D, sometimes without you realizing it until the bill arrives.

Social Security taxation — Up to 85% of your Social Security benefit can become taxable depending on your other income. The accounts you draw from shape that outcome.

Your legacy — Inherited traditional IRAs must generally be emptied by beneficiaries within 10 years, fully taxable. A Roth IRA passes income tax-free. What you leave behind, and in which account, matters.

How RetireRight Helps Build Your Sequencing Strategy

We work with families across West Des Moines, Dubuque, and the broader Midwest to build a withdrawal plan designed to fit their actual lives, not a generic rule of thumb. That process typically includes:

A full review of your taxable, traditional, and Roth account balances and how they are positioned today
Year-by-year tax bracket planning through retirement, including evaluating opportunities for Roth conversions
Coordination with your Social Security claiming strategy
Proactive RMD planning well before age 73
Medicare premium and IRMAA threshold awareness built into your withdrawal timing
Legacy and beneficiary planning with the goal that the accounts you leave behind work in your heirs' favor

Our job is to make sure the distribution phase of your retirement is planned with as much care as the accumulation phase was. The families who plan for this are the ones who started the conversation early.

Frequently Asked Questions

Every person's sequencing plan is different, as you have a wide range of factors to consider. Below are some of the questions we get most often to get you started. If you have additional questions or would like to review how to create your Retirement Income Sequencing plan, schedule a call to me with one of our investment fiduciary advisors.

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At what age do required minimum distributions begin?

Under current law, RMDs from traditional IRA and 401(k) accounts begin at age 73. The amount is calculated based on your account balance and IRS life expectancy tables. Failing to take the correct RMD triggers a significant penalty, so planning ahead matters.

Can the order of retirement account withdrawals affect my Medicare premiums?

Yes. Medicare Part B and Part D premiums are tied to your income from two years prior. A large traditional IRA withdrawal can trigger IRMAA surcharges the following year. Thoughtful income management in retirement can help you stay below those thresholds.

How do I know if I need help with withdrawal sequencing?

If you have savings in more than one type of retirement account and are within 10 years of retirement, or already retired, a coordinated withdrawal strategy is worth a conversation. The earlier you start planning, the more options you have.

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If you have questions or concerns about your retirement income sequencing or other aspects of your retirement plan. Let's connect to create a personalized retirement roadmap.