“Which Account Do I Pull From First?” A Guide to Smarter Retirement Withdrawals

March 26, 2026

Key Takeaways


  • How you withdraw retirement income is just as important as how much you've saved.

  • The order you pull from accounts can significantly impact your tax bill over time.

  • A coordinated strategy helps your portfolio last longer and behave more predictably.

  • Withdrawal planning works best when it's aligned with your broader financial plan, not handled account by account.

You've spent years saving for retirement.


But when it comes time to actually use that money, the strategy isn't always as clear.


While saving is important, just as important is how you'll turn those savings into income. And decisions like which accounts to draw from first or how to manage taxes can have a real impact on how long your money lasts.


A thoughtful withdrawal strategy helps you create reliable income, reduce unnecessary taxes, and avoid costly mistakes along the way. 


Why Your Retirement Withdrawal Order Matters


It's tempting to assume you can just pull from whichever account is most convenient. And honestly, in the short term, that works fine.


Over a 20- or 30-year retirement, though, the sequence of your withdrawals shapes your tax bracket every single year, your Medicare premiums, the growth potential of your remaining accounts, and what you eventually leave behind for your family.


Your retirement accounts aren’t taxed the same way:


Traditional 401(k) or IRA

Tax-deferred, owing ordinary income tax on withdrawals

Roth IRA

Tax-free, no taxes on qualified withdrawals

Taxable Brokerage Account

More favorable long-term capital gains rate when holding investments for a year or more

Traditional 401(k) or IRA Roth IRA Taxable Brokerage Account
Tax-deferred, owing ordinary income tax on withdrawals Tax-free, no taxes on qualified withdrawals More favorable long-term capital gains rate when holding investments for a year or more


A thoughtful withdrawal strategy draws from each bucket in a way that keeps your taxable income as smooth and low as possible throughout retirement.


The Traditional Withdrawal Order (and When It Makes Sense)


For many retirees, the conventional wisdom goes like this:


1. Start with taxable accounts

Brokerage accounts and savings are often tapped first because the growth in these accounts is taxed annually anyway, and using them first lets your tax-advantaged accounts continue to grow undisturbed.


2. Move to tax-deferred accounts next

Your traditional IRA, 401(k), or 403(b) accounts are next in line. Withdrawals here are taxed as ordinary income, so drawing on them in a thoughtful, measured way helps you avoid unnecessary jumps into higher tax brackets.


3. Preserve Roth accounts for last

Roth IRAs aren't subject to Required Minimum Distributions (RMDs) during your lifetime, and withdrawals are tax-free. Letting your Roth sit and grow as long as possible tends to pay off, both for you and for any heirs who may inherit it.


This framework is a reasonable starting point, and for some retirees, it works well.


But it's not a universal rule.


Where the Traditional Order Falls Short


Here's a scenario we see fairly often.


A client retires at 63 with most of their savings in a traditional IRA. They draw from their taxable accounts first so their retirement savings can continue growing.


But by the time they hit 73, their IRA has grown large enough that the required distributions push them into a higher tax bracket than they were in at the start of retirement.


Throw in Medicare surcharges (called IRMAA), and what felt like a smart, conservative strategy in their 60s has created a real tax burden a decade later.


That's why we often recommend a more nuanced approach—one that considers what your tax picture looks like across your entire retirement, not just in the first year or two.


Tax Diversification and the Case for Blending


A blended decumulation strategy, rather than a strict withdrawal sequence, often serves retirees better than following one account type at a time. The goal is to keep your taxable income in a range that helps you stay below the thresholds that trigger higher tax brackets, IRMAA surcharges, and heavier taxation on Social Security benefits.


Here's a practical example:


If your expenses can be covered by a mix of Social Security and modest IRA withdrawals that keep you in the 12% tax bracket, you might also consider doing some Roth conversions that same year. You'd move money from your traditional IRA to your Roth while your tax rate is still low.


Yes, you pay the tax now. But from that point on, your Roth grows tax-free, and your future RMDs shrink.


It takes careful planning and realistic income projections, but for many retirees, it's one of the most effective tools available.

This is where many retirees run into trouble.
They've saved enough for retirement, but their withdrawal strategy wasn't designed as part of a larger plan.
➡ See how a comprehensive retirement plan comes together

The Behavioral Side of Withdrawal Strategy


We've covered the math, but there's a human side to this that doesn't get talked about enough.


A lot of retirees feel hesitant to touch certain accounts, especially ones they spent decades carefully building.


We've worked with clients who had more than enough saved but were pulling too little, simply because spending down their IRA felt uncomfortable. That emotional hesitation sometimes led them to draw from the wrong accounts for the wrong reasons.


Having a clear, written withdrawal plan takes that pressure off. When you know which account you're pulling from and why, you're less likely to second-guess yourself when markets get bumpy or make reactive moves that throw off an otherwise solid plan.


Think of it as guardrails: a defined spending amount, a clear account order, and a scheduled check-in to revisit when things change.


There’s No One-Size-Fits-All Answer


The right withdrawal sequence depends on things specific to you: how much you have and where it's held, your expected income in retirement, when you plan to take Social Security, whether you have a pension, how your state treats retirement income, and what you'd like to leave behind.


A strategy that's a perfect fit for one person can create real headaches for another. That's why this is one of the first things we talk through with clients who are getting close to retirement—and one we revisit as things change.


If you're within five to ten years of retirement and haven't mapped out a withdrawal plan yet, now is a good time to start. Before RMDs kick in is often when you have the most flexibility to plan.


We'd love to walk through what this looks like for your specific situation.


Reach out anytime at info@fivepinewealth.com or call 877.333.1015.


Frequently Asked Questions


Q: Does my withdrawal order change if I have a pension?


A: Yes, it can. A pension provides guaranteed income, so you may already be covering a good chunk of your expenses before touching your investment accounts. That changes how aggressively you need to draw from tax-deferred accounts, and may create more room for Roth conversions early in retirement.


Q: How does Social Security timing affect my withdrawal strategy?


A: If you delay Social Security to boost your monthly benefit, you'll need to cover living expenses from your portfolio in the meantime. That gap period is often a smart time to draw down traditional IRA balances at a lower tax rate, before Social Security income pushes your taxable income higher.


Q: Can my withdrawal order affect my Medicare premiums?


A: It can. Medicare uses your income from two years prior to set your Part B and Part D premiums. A large IRA withdrawal that bumps your income above certain thresholds could mean higher premiums (IRMAA surcharges) two years down the road. Keeping those thresholds in mind when planning withdrawals can help you avoid some unwelcome surprises.

Five Pine Wealth Management is a fee-only, fiduciary financial planning firm based in Coeur d'Alene, Idaho. We work with individuals and families across the country who want thoughtful, personalized guidance — without the conflicts of interest that come with commission-based advice.


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