You’ve worked hard, saved diligently, and made it to the doorstep of retirement. Now comes the big question: How do you turn all that saving into reliable income—and feel confident spending it?

For many couples, the fear isn’t just running out of money. It’s the worry that a misstep now – spending from the wrong account, triggering unnecessary taxes, or overlooking a key rule – could undo years of careful planning.

The good news? There’s a simple, easy-to-use framework for deciding which accounts to tap first. It’s not about fancy financial engineering. It’s about giving your savings the best chance to last, while helping you spend without second-guessing.

Think of your retirement accounts as different tools in a toolbox. Each serves a purpose, but you need to use them in the right order to get the most out of them. Here’s the sequence that works for most retirees, why it matters, and when exceptions make sense.

The Standard Withdrawal Order

When it comes to retirement withdrawals, there’s a time-tested sequence that maximizes your after-tax spending power. It’s based on how different account types are taxed and how your money continues to grow.

Step 0: Current income

If you’re still working, that’s your first source. Let your investments grow as long as possible.

Step 1: Required Minimum Distributions (RMDs)

Once you reach age 73, the IRS requires you to withdraw minimum amounts from traditional IRAs and 401(k)s. Miss one, and the penalty can be steep. If you don’t need the full amount, you can reinvest it in a taxable account or donate it directly to charity (which can also reduce your tax bill).

Step 2: Taxable accounts

After required withdrawals, turn to your taxable accounts – brokerage accounts, savings, and other non-retirement investments. You’ve already paid tax on what you contributed, but you also pay tax each year on dividends, interest, and realized gains. Spending these assets first cuts that annual “tax drag,” allowing your retirement accounts to keep compounding undisturbed.

Step 3: Tax-Deferred accounts

Next come traditional IRAs and 401(k)s. Withdrawals are taxed as ordinary income. By waiting until after taxable assets, you give these accounts more years of tax-sheltered growth.

Step 4: Tax-Exempt accounts

Last in line: Roth IRAs and Roth 401(k)s. Since withdrawals are tax-free, these accounts are the most powerful for long-term growth. Spending them later maximizes the amount that can compound tax-free.

Why This Order Works

The sequence isn’t about eliminating taxes – it’s about stretching your spending power over a lifetime.

• Taxable assets first: Reduces the ongoing tax drag from dividends and interest.
• Tax-deferred accounts later: Keeps the tax-advantaged growth engine running.
• Tax-exempt assets last: Preserves the accounts that deliver completely tax-free growth for as long as possible.

💡 Withdrawal order is one part of the plan, but it’s not the whole picture. Retirement is about more than which account you spend from first – it’s about how those dollars connect to the life you want to live. That’s why we created our free workbook, Life Beyond the Numbers. It helps couples step back from the spreadsheets, talk through what matters most, and see how their money supports their vision. Download your copy here.

Exceptions to the Rule

While the standard order works for most, there are times when it makes sense to adjust.

• Roth conversions in low-income years: Early retirement years may be the perfect window to shift traditional IRA dollars into Roth accounts at a lower tax rate.
• ACA premium credits: If you retire before Medicare, carefully managing withdrawals can preserve valuable health insurance subsidies.
• Medicare IRMAA cliffs: A small increase in income can mean much higher premiums. Strategic withdrawal planning can help you stay below the thresholds.
• Charitable giving: Qualified Charitable Distributions from IRAs allow you to meet giving goals and satisfy RMDs without increasing taxable income.
• Estate planning: Traditional IRAs can create tax burdens for heirs under the SECURE Act, while Roth accounts often make better legacy assets.

Putting It All Together

Once you understand the framework, your annual withdrawal plan becomes more straightforward.

• Start each year by clarifying your spending needs.
• Map out income sources (Social Security, pensions, annuities, etc).
• If you’re subject to Required Minimum Distributions, make sure you withdraw the right amount over the year to avoid penalties.
• Once your RMD is dealt with, use taxable accounts first, then tax-deferred, and finally tax-exempt accounts.
• Stay alert for tax cliffs, healthcare considerations, and charitable opportunities.

And remember: it helps to walk through this as a couple, so both of you feel comfortable with where the money is coming from each year. That way, if something unexpected happens, you both know the plan and can feel confident sticking to it.

This process isn’t about squeezing every last dollar – it’s about giving you confidence that your money will support the retirement you’ve envisioned.

The order you draw from your accounts matters because it balances today’s spending with tomorrow’s security. By following a clear sequence – and making thoughtful adjustments when needed – you can protect what you’ve built and enjoy retirement without second-guessing every decision.

But withdrawals are just one piece of the puzzle. Retirement isn’t only about tax brackets; it’s about the life you want to live. That’s why we created our free workbook, Life Beyond the Numbers. It’s designed to help couples like you connect your money to your values, clarify your top priorities, and spark conversations that bring peace of mind.

👉 Download your copy of Life Beyond the Numbers today and start shaping a retirement that feels secure, meaningful, and truly your own.