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Quick Answer
In retirement, most financial planners recommend withdrawing from taxable accounts first, then Traditional IRAs, and Roth IRAs last. The IRS requires Traditional IRA holders to take required minimum distributions (RMDs) starting at age 73, making Roth IRAs — which have no RMDs — the most valuable account to preserve longest.
The IRA withdrawal order retirement strategy you choose directly affects how much of your savings survives taxes. According to IRS guidance on required minimum distributions, Traditional IRA withdrawals are taxed as ordinary income, while qualified Roth IRA withdrawals are completely tax-free. Getting this order wrong can cost retirees tens of thousands of dollars over a multi-decade retirement.
With tax brackets shifting and RMD rules updated after the SECURE 2.0 Act, the sequencing question has never been more consequential.
Key Takeaways
- Traditional IRA withdrawals are taxed as ordinary income and count toward adjusted gross income, which can trigger Medicare IRMAA surcharges and increase the taxable share of Social Security benefits. See IRS Roth IRA rules for a direct comparison.
- Roth IRA qualified withdrawals are 100% tax-free and do not affect AGI, Social Security taxation, or Medicare premiums, per IRS Roth IRA guidance.
- Traditional IRA RMDs begin at age 73 under the SECURE 2.0 Act; missing one triggers a penalty of 25% of the amount not withdrawn, per IRS RMD rules.
- Delaying Social Security to age 70 increases your monthly benefit by up to 8% per year beyond full retirement age, creating a low-income window ideal for Traditional IRA drawdown or Roth conversions, according to the Social Security Administration.
- Up to 85% of Social Security benefits can become taxable once income exceeds certain thresholds — and Traditional IRA withdrawals count toward that income, per SSA benefits guidance.
- The 2025 IRA contribution limit is $7,000 ($8,000 if age 50 or older) for both Traditional and Roth accounts, per IRS contribution rules.
Why Does Withdrawal Order Matter in Retirement?
Withdrawal order determines your tax bill each year — and your total lifetime tax burden. Pulling from the wrong account at the wrong time can push you into a higher bracket, trigger Medicare surcharges, or accelerate RMDs.
Retirees typically hold three types of accounts: taxable brokerage accounts, tax-deferred accounts (Traditional IRAs and 401(k)s), and tax-free accounts (Roth IRAs). Each is taxed differently. Taxable accounts generate capital gains taxes, often at lower rates. Traditional IRAs add to your ordinary income. Roth IRAs add nothing to taxable income at all.
The standard sequence — taxable first, tax-deferred second, tax-free last — lets Roth assets compound untouched for the longest period. But individual circumstances, including your current tax bracket and projected future income, can justify deviations from this default.
Key Takeaway: Withdrawal order determines lifetime tax costs. The standard rule is taxable accounts first, Traditional IRA second, Roth IRA last — because Roth IRA qualified distributions are 100% tax-free and no RMDs are required during the account owner’s lifetime.
How Are Traditional IRA and Roth IRA Withdrawals Taxed Differently?
Traditional IRA withdrawals are taxed as ordinary income in the year you take them. Roth IRA qualified withdrawals are entirely tax-free, provided you are at least 59½ and the account has been open for at least five years.
For Traditional IRAs, every dollar withdrawn adds to your adjusted gross income (AGI). A large withdrawal can push you into a higher federal bracket, increase the taxable portion of Social Security benefits (up to 85% of benefits become taxable above certain income thresholds, per Social Security Administration guidelines), and trigger Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare Part B and Part D premiums.
Roth IRAs carry none of those risks. Because Roth contributions were made with after-tax dollars, qualified distributions do not count toward AGI, do not affect Social Security taxation, and do not trigger IRMAA. That makes Roth assets uniquely powerful as a buffer against income spikes.
The Five-Year Rule for Roth IRAs
Roth IRA earnings are only tax-free if the five-year holding period has been satisfied and the account owner is at least 59½. If you opened a Roth IRA recently, plan withdrawals carefully to avoid partially taxable distributions on earnings.
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax on contributions | Pre-tax (deductible) | After-tax (non-deductible) |
| Tax on withdrawals | Ordinary income rate | Tax-free (qualified) |
| RMDs required | Yes, starting at age 73 | No (owner’s lifetime) |
| Early withdrawal penalty | 10% before age 59½ | 10% on earnings before 59½ |
| Affects Social Security tax | Yes | No |
| Affects IRMAA surcharges | Yes | No |
| 2025 contribution limit | $7,000 ($8,000 if 50+) | $7,000 ($8,000 if 50+) |
Key Takeaway: Traditional IRA withdrawals are taxed as ordinary income and can trigger Social Security taxation on up to 85% of benefits. Roth IRA qualified withdrawals are tax-free and do not affect AGI, per IRS Roth IRA rules — making sequencing these accounts correctly a major tax lever.
What Is the Optimal IRA Withdrawal Order Retirement Strategy?
The most widely recommended IRA withdrawal order retirement sequence is: taxable brokerage accounts first, Traditional IRA (or 401(k)) second, and Roth IRA last. This preserves tax-free growth in the Roth as long as possible.
Most retirees begin by spending down taxable accounts because long-term capital gains rates (0%, 15%, or 20%) are lower than ordinary income rates applied to Traditional IRA withdrawals. Once taxable accounts are depleted, Traditional IRA withdrawals fund expenses while Roth assets continue compounding. The Roth IRA is reserved for large or unpredictable expenses, healthcare costs, or as a legacy asset for heirs.
A rigid sequence is not always optimal, though. Many tax professionals, including those at Fidelity Investments, recommend a tax bracket management approach. This involves intentionally withdrawing from the Traditional IRA in low-income years to fill up lower tax brackets — even before RMDs force the issue — which reduces future RMD amounts and prevents a large tax spike later.
Roth Conversions as Part of the Strategy
Between retirement and age 73, many retirees have a window of lower income. Converting Traditional IRA funds to a Roth IRA during this window, paying taxes at today’s lower rates, can dramatically reduce lifetime taxes. This strategy is sometimes called a Roth conversion ladder, and it is especially effective when income is temporarily low.
The math behind a Roth conversion ladder is straightforward. Each dollar converted today reduces the Traditional IRA balance subject to future RMDs. Smaller RMDs mean lower ordinary income in your 70s and 80s, which in turn reduces the chance of crossing IRMAA thresholds or triggering the 85% Social Security inclusion rule. The savings compound over time in a way that raw investment returns inside the account simply cannot replicate.
Timing matters. Converting too aggressively in a single year can itself push you into a higher bracket or trigger IRMAA surcharges. Most planners run annual projections to find the conversion amount that fills the current bracket without crossing into the next. It is painstaking work, but it is also some of the most valuable planning a retiree can do.
Key Takeaway: The standard IRA withdrawal order retirement sequence — taxable first, Traditional IRA second, Roth last — is a strong default. Proactive Roth conversions before age 73 can reduce future RMDs by tens of thousands; see Roth IRA vs Traditional IRA in 2026 for a full tax comparison.
How Do RMD Rules Affect Your IRA Withdrawal Order?
Required minimum distributions from Traditional IRAs force withdrawals starting at age 73, regardless of whether you need the money. Failing to take an RMD triggers a penalty of 25% of the amount not withdrawn (reduced to 10% if corrected quickly), per IRS RMD rules updated under SECURE 2.0.
RMD amounts are calculated by dividing your prior-year account balance by an IRS life expectancy factor. As the account grows, so do RMDs, which can push retirees into higher brackets unexpectedly. This is why the IRA withdrawal order retirement decision cannot be made once and forgotten. It requires annual review.
Roth IRAs have no RMD requirements during the original owner’s lifetime. This makes them the ideal account to hold in reserve, particularly for retirees who do not need the money immediately. Inherited Roth IRAs are subject to RMDs for non-spouse beneficiaries under the 10-year rule established by the SECURE Act, but the distributions remain income-tax-free.
If you want to understand how contribution limits affect how much you build in each account before retirement, see our guide to IRA contribution limits for 2026.
Key Takeaway: Traditional IRA RMDs begin at age 73 under SECURE 2.0, and missing one triggers a 25% penalty on the shortfall. Roth IRAs have no lifetime RMDs, per IRS RMD guidelines — making them the preferred account to preserve for late retirement or estate planning.
How Traditional IRA Withdrawals Interact with Medicare and Social Security
The interaction between Traditional IRA withdrawals, Medicare premiums, and Social Security taxation is where many retirees get caught off guard. It is not enough to know your marginal tax bracket; the hidden costs of ordinary income can push your effective tax rate significantly higher.
IRMAA Surcharges on Medicare Premiums
Medicare Part B and Part D premiums are not flat fees. Above certain income thresholds, the Social Security Administration applies IRMAA surcharges that can add hundreds of dollars per month to your Medicare costs. The calculation uses your modified adjusted gross income from two years prior, so a large Traditional IRA withdrawal in 2024 shows up in your 2026 Medicare premiums.
Because Roth IRA distributions do not count toward MAGI, a retiree who draws from a Roth instead of a Traditional IRA in a high-income year may avoid a surcharge tier entirely. The difference between IRMAA tiers can be significant — the gap between the standard Part B premium and the highest surcharge tier runs into thousands of dollars per year. For premium details, see Medicare.gov Part B cost information.
Social Security Benefit Taxation
The Social Security taxation thresholds have not been indexed for inflation since 1983, which means more retirees cross them every year. Once your combined income (AGI plus half of Social Security benefits) exceeds $25,000 for single filers or $32,000 for married filers, up to 50% of benefits become taxable. Above $34,000 for single filers or $44,000 for joint filers, up to 85% of benefits are taxable, per SSA income tax guidance.
A retiree with a $30,000 Traditional IRA withdrawal and $24,000 in Social Security benefits may find that most of those benefits become taxable — a steep cost that a better sequencing strategy could have avoided. Roth withdrawals, because they are excluded from combined income, simply do not cause this problem.
Key Takeaway: Traditional IRA withdrawals raise MAGI, which can trigger IRMAA surcharges on Medicare premiums and cause up to 85% of Social Security benefits to become taxable. Roth withdrawals affect neither, per SSA income tax guidance and Medicare.gov premium data.
How Tax Bracket Filling Works in Practice
Tax bracket filling is the deliberate practice of withdrawing just enough from a Traditional IRA each year to bring your taxable income up to — but not over — the top of a given bracket. Done consistently from retirement through age 73, it can meaningfully shrink the balance subject to forced RMDs.
The mechanics are simple. Say you retire at 63 and your only income is a small pension that leaves you solidly in the 12% federal bracket. Rather than leaving your entire Traditional IRA to compound untouched, you withdraw or convert enough to fill the 12% bracket each year. You pay tax now at 12%, reducing the account balance and its future RMDs, which might otherwise generate income taxed at 22% or 24% when stacked on top of Social Security.
This strategy requires projections, not guesswork. A tax professional or financial planner can model the tradeoff between today’s bracket cost and future RMD reduction. The calculation also needs to account for IRMAA thresholds, state income taxes, and any expected changes to your other income sources.
Coordinating Withdrawals with a Spouse
Married couples have additional flexibility. Because federal tax brackets for joint filers are roughly double those for single filers, a couple can often fill the 12% or 22% bracket with more Traditional IRA income than a single filer could. The strategy becomes more urgent when one spouse is significantly older, since the surviving spouse will eventually file as single, facing narrower brackets on the same RMD income.
Starting Roth conversions or bracket-filling withdrawals earlier, while both spouses are alive and the joint brackets are wider, directly reduces the tax burden the surviving spouse will face. This is one of the most under-discussed dimensions of IRA withdrawal planning.
Key Takeaway: Married couples can fill wider joint tax brackets with Traditional IRA withdrawals before RMDs begin, reducing the tax burden the surviving spouse faces as a single filer. For a full comparison of how each account type is taxed, see our guide to Roth IRA vs Traditional IRA options.
When Should You Break the Standard Withdrawal Order?
The standard IRA withdrawal order retirement sequence should be adjusted when tax circumstances or income sources create a better opportunity. Four common situations justify deviating from the default.
- Low-income years before RMDs begin: If your income drops between retirement (say, age 62) and age 73, withdraw from the Traditional IRA or convert to Roth to fill lower brackets.
- High medical expenses: Deductible medical costs can offset Traditional IRA income, making large withdrawals in those years more tax-efficient.
- Social Security timing: Delaying Social Security to age 70 increases your benefit by up to 8% per year between full retirement age and 70, per Social Security Administration delayed retirement credits. During the delay period, tapping the Traditional IRA to fund living expenses can be optimal.
- Estate planning goals: If leaving assets to heirs is a priority, Roth IRAs pass income-tax-free to beneficiaries. Preserving the Roth at the expense of faster Traditional IRA drawdown makes sense in this case.
Coordinating these strategies with a Qualified Longevity Annuity Contract (QLAC) or other income tools adds further complexity. For those managing multiple income streams, a structured monthly budget helps track exactly how much you need from each account each year.
Key Takeaway: Delaying Social Security to age 70 increases benefits by up to 8% per year, creating a low-income window to draw down Traditional IRA funds at reduced rates — a strategy validated by SSA delayed retirement credit data and widely endorsed by retirement planners.
IRA Withdrawal Order and Estate Planning
For retirees who do not expect to spend down their full IRA balances, the withdrawal order question extends beyond their own tax situation to their heirs’ tax situations as well.
Traditional IRA assets passed to non-spouse beneficiaries are subject to the 10-year rule under the SECURE Act. Beneficiaries must fully withdraw the inherited Traditional IRA within 10 years, and every distribution counts as ordinary income. If your heirs are in their peak earning years when they inherit, those distributions could be taxed at 32% or 37% — far higher than the rate you might pay during retirement.
Roth IRAs inherited by non-spouse beneficiaries are also subject to the 10-year rule, but the distributions remain income-tax-free. That difference is substantial. A retiree who strategically converts Traditional IRA funds to Roth during low-income years is not just managing their own taxes; they are changing the tax profile of the asset their heirs will receive.
This does not mean every retiree should prioritize estate efficiency over their own retirement security. But when the choice is genuinely close — for instance, when a retiree has more assets than they realistically need — the Roth’s estate planning advantage is a legitimate factor worth weighing.
Practical Steps for Building Your Withdrawal Strategy
Abstract strategy only matters if it translates into a concrete annual plan. The following framework gives structure to the decision each year.
Step 1: Estimate Your Annual Income from Fixed Sources
Before deciding how much to draw from any IRA, tally the income you will receive regardless: Social Security (if you have claimed it), pension payments, annuity income, and any part-time work. This is your baseline income for the year.
Step 2: Identify Your Target Tax Bracket
With baseline income established, determine how much room remains in your current federal bracket before crossing into the next tier. That room is your opportunity for Traditional IRA withdrawals or Roth conversions at the current rate.
Step 3: Prioritize Roth Conversions Over Withdrawals When Possible
If you do not need the Traditional IRA funds for living expenses, consider converting rather than simply withdrawing. A conversion shifts money to the Roth, where it grows tax-free and is no longer subject to future RMDs. A withdrawal just removes the money from the tax-advantaged system entirely.
Step 4: Use Roth for Expense Spikes
Large, unexpected expenses — a home repair, a medical procedure, a family emergency — are exactly what the Roth IRA is best suited for. Because Roth withdrawals do not affect AGI, tapping the Roth for a large expense in a given year does not trigger IRMAA surcharges or push more Social Security into taxable territory. Keeping a meaningful Roth balance as a flexible reserve is strategically sound.
Step 5: Revisit the Plan Annually
Tax laws change. Income changes. Account balances change. A withdrawal order strategy that was optimal at age 65 may need meaningful adjustment by age 70. An annual review with a tax professional or financial planner is not optional if you want to stay ahead of avoidable tax costs.
Key Takeaway: Build your withdrawal strategy around a specific annual income target and available bracket space, not a fixed rule. Use the Roth for flexibility, the Traditional IRA for planned drawdown, and revisit both every year. A structured monthly budget can help track withdrawal pacing throughout the year.
Frequently Asked Questions
Should I withdraw from my Traditional IRA or Roth IRA first in retirement?
Withdraw from your Traditional IRA before your Roth IRA in most cases. Traditional IRA withdrawals are taxed as ordinary income, so taking them first while keeping Roth assets growing tax-free longer reduces your lifetime tax burden. Adjust this only if you are in an unusually low-income year where Roth withdrawals are more efficient.
What is the best IRA withdrawal order retirement strategy to minimize taxes?
The most tax-efficient IRA withdrawal order retirement strategy is taxable accounts first, tax-deferred accounts (Traditional IRA, 401k) second, and Roth IRA last. Between retirement and age 73, consider Roth conversions to reduce future RMDs. This approach keeps your income — and your tax bracket — as low as possible for as long as possible.
At what age do I have to start taking money out of a Traditional IRA?
Under the SECURE 2.0 Act, you must begin taking required minimum distributions from your Traditional IRA at age 73. If you turned 72 before January 1, 2023, different rules apply. Missing an RMD triggers a penalty of 25% of the amount not taken.
Does taking money from a Roth IRA affect my Social Security benefits?
No. Qualified Roth IRA withdrawals do not count as income for Social Security taxation purposes. By contrast, Traditional IRA withdrawals increase your adjusted gross income, which can cause up to 85% of your Social Security benefits to become taxable above certain income thresholds.
Can I use both my Traditional IRA and Roth IRA at the same time in retirement?
Yes. Many retirees blend withdrawals from both accounts to manage annual income precisely. Drawing some from a Traditional IRA and some from a Roth IRA allows you to stay below key tax thresholds — such as IRMAA Medicare surcharge triggers or the 22% bracket boundary. This is sometimes called a “tax bracket filling” strategy.
How does a Roth conversion affect my IRA withdrawal order retirement plan?
A Roth conversion moves money from a Traditional IRA to a Roth IRA, triggering taxes now but eliminating taxes on future growth and distributions. Converting during low-income years — typically between retirement and RMD age — shrinks the Traditional IRA balance, reducing future forced RMDs. This is one of the most powerful tools in IRA withdrawal order retirement planning. Learn more in our comparison of Roth IRA vs Traditional IRA options.
