Where you withdraw retirement income from can significantly affect how much you keep after taxes. Sequencing withdrawals from taxable, tax-deferred, and tax-free accounts is a key planning skill.
At Becker Retirement, we help clients build withdrawal strategies that stretch their savings further by managing tax impact year by year.
The order in which you tap different account types can make a meaningful difference over a 20 or 30 year retirement.
Tax-smart planning is not about avoiding taxes entirely. It is about paying them strategically.
Understanding account types
Taxable accounts hold assets you have already paid taxes on. Tax-deferred accounts like traditional IRAs and 401(k)s are taxed when you withdraw. Roth accounts offer tax-free qualified withdrawals.
Each account type has different rules for required minimum distributions, capital gains, and ordinary income taxation.
Knowing what you hold and where is the starting point for any withdrawal strategy.
A balanced approach considers all three buckets together.
Sequencing strategies
A common approach is to spend taxable accounts first, then tax-deferred, and save Roth for last. This allows tax-deferred accounts more time to grow while managing current tax brackets.
Some retirees benefit from Roth conversions in lower-income years before RMDs begin. This can reduce future tax burdens on large required distributions.
"The most tax-efficient withdrawal plan is one that adapts as your income, tax rates, and account balances change over time."
Managing tax brackets and RMDs
Required minimum distributions begin at age 73 for most retirees. Large RMDs can push you into higher tax brackets and increase Medicare premiums.
Planning ahead for RMDs, including qualified charitable distributions, can help manage the tax impact.
We coordinate withdrawal timing with your tax advisor to keep more of what you have earned.
Build your withdrawal plan
Tax-smart withdrawals require ongoing attention, not a one-time decision. Becker Retirement helps you stay on track.
Call (888) 791-8448 or email support@beckerretirement.com to schedule a complimentary discovery call.
Smart sequencing today can mean more income tomorrow.
