Withdrawal Order Optimizer

You have a taxable brokerage account, a traditional IRA, and a Roth. Which one do you spend first? Get the order right and you can keep tens of thousands more across retirement, for the exact same lifestyle. This tool sequences your accounts so the lowest-taxed dollars come out first.

The decision it solves

Most retirees drain accounts in the order that feels safe: spend the taxable money, leave the IRA alone, save the Roth for last. Half of that instinct is right. The trouble is doing it on autopilot, because the autopilot ignores your tax bracket and your future RMDs.

The conventional order is taxable first, then tax-deferred, then Roth last. It’s a fine default. It defers tax and lets the Roth compound longest. But the default leaves money on the table whenever you have a low-income year you didn’t use, or an IRA so large that leaving it untouched just builds a tax bomb that detonates as forced withdrawals at 73 or 75.

How the math works

Three buckets, three tax treatments. Taxable accounts owe tax only on gains, often at long-term capital gains rates, which for 2026 sit at 0% for a married couple with taxable income up to $98,900 and 15% above that. Traditional IRA dollars are fully ordinary income when withdrawn. Roth dollars are tax-free and carry no RMD.

The optimizer reads your spending need, your other income, and the 2026 brackets, then asks a sharper question than “which account.” It asks: what’s the cheapest next dollar? Some years that’s a long-term gain taxed at 0%. Some years it’s an IRA withdrawal that fills up the 12% bracket, which for a couple runs to $100,800 of taxable income in 2026. The point is to fill the cheap brackets on purpose instead of skipping them and paying more later.

A worked example

A married couple, both 68, not yet taking Social Security, needs $90,000 to live on this year. They hold all three account types.

Run the autopilot and they sell taxable assets for the full $90,000. Their ordinary income is near zero, so their traditional IRA, which they didn’t touch, keeps growing toward a future RMD that will someday stack on top of Social Security and shove them into the 24% bracket.

Run the optimizer and it sees the empty 10% and 12% brackets sitting there unused. It pulls maybe $40,000 from the IRA to fill them at low rates, then takes the remaining $50,000 from taxable savings at a 0% capital gains rate. Same $90,000 in their pocket. But they just moved $40,000 out of a future tax bomb at today’s bargain rate, and paid almost nothing extra to do it.

The optimizer’s job is to never waste a low bracket. An empty 12% bracket this year often becomes a 24% withdrawal later.

The hidden cost most miss

Spend the IRA too aggressively and you can spike your income enough to tax more of your Social Security and trip an IRMAA surcharge on Medicare. Spend it too timidly and RMDs do the spiking for you, on the IRS’s schedule instead of yours. The order also feeds sequence-of-returns risk: drawing from stocks in a down year locks in losses you can’t recover. A good sequence pulls from cash and bonds when equities are bleeding.

If your accounts are large

The bigger the traditional IRA, the more the simple “Roth last” rule backfires. A $3M IRA left to compound becomes a forced-income machine. The fix is to blend withdrawals with Roth conversions during the low-income window before RMDs, deliberately filling brackets you’d otherwise skip. See tax-efficient withdrawal order for the full playbook.

Pick the order with intent, not habit. The same retirement, taxed two different ways, is two different retirements.