Retirement Withdrawal Calculator

The conventional order is: required minimum distributions first, then the taxable brokerage account, then traditional IRAs and 401(k)s, and Roth accounts last. The logic is simple. Spending taxable money first keeps the tax-deferred and tax-free accounts compounding longer, and selling from a taxable account is usually cheap, because part of every sale is your own cost basis coming back untaxed and the gain is taxed at long-term capital gains rates rather than as ordinary income.

RMDs sit at the top because they are not optional. Once you reach RMD age (73, or 75 if born in 1960 or later), the minimum has to come out of traditional IRAs and most workplace plans each year, whether or not you need it, and it is taxed as ordinary income. The RMD calculator shows the amount.

The order is a starting point, not a rule. Followed strictly, it tends to produce a decade of very low taxable income in your 60s, when you live on the taxable account, followed by a tax spike in your 70s, when Social Security, RMDs from an untouched IRA and any pension all arrive together. The goal is not to pay the least tax this year. It is to pay the least tax over the whole retirement, and for your heirs. Our guide to retirement withdrawal order works through the full sequence with examples.

Break it whenever an extra dollar of IRA income costs less tax today than it will later. For most retirees with large tax-deferred balances, that is the years between retiring and the start of Social Security and RMDs. Four situations come up most often.

1. Fill the low brackets in the gap years

A couple living on their taxable account may report very little taxable income. That wastes the 10% and 12% brackets, which will not be available once RMDs and Social Security start. Drawing some IRA money each year, or converting it to a Roth, uses those brackets at a known, low rate. In 2026, a married couple filing jointly, both 65 or older, can have about $148,300 of ordinary income before any of it is taxed above 12%: the $100,800 top of the 12% bracket, plus the $35,500 standard deduction for two people over 65, plus two $6,000 senior deductions (IRS, 2026). The senior deduction runs through 2028 and phases out above $150,000 of joint income, so this window is widest now.

Whether to stop at the top of 12%, 22% or 24% depends on the rate you expect later. If the IRA is large enough that RMDs alone will push you into the 24% bracket in your late 70s, paying 22% now is a good trade. Our guide to Roth conversions before RMDs covers the arithmetic.

2. Watch the Medicare IRMAA thresholds

From 65, Medicare Part B and Part D premiums rise in steps once modified adjusted gross income passes $218,000 for a joint return or $109,000 for a single filer in 2026 (CMS, 2026). Each step is a cliff: one dollar over the line triggers the full surcharge for the year. The first tier alone costs a couple about $2,297 a year. For a couple over 65 taking the standard deduction, $218,000 of income is roughly $178,700 of taxable income, inside the 22% bracket, so filling the 22% bracket completely crosses the first IRMAA line.

Medicare looks back two years: 2026 premiums are set from your 2024 tax return (SSA). That makes 63 the first year when income affects premiums, and it means a one-off event such as a large Roth conversion or a home sale shows up in your premiums two years later. Our Medicare and IRMAA guide has the full table.

3. Harvest capital gains at 0%

Long-term gains and qualified dividends are taxed at 0% while total taxable income stays at or below $98,900 for a joint return or $49,450 for a single filer in 2026 (IRS Rev. Proc. 2025-32). Ordinary income fills that space first, so the 0% band competes with IRA withdrawals and conversions. In a year with little ordinary income, selling appreciated shares and buying them back resets the cost basis tax-free. In a year when you are filling the 12% bracket from the IRA, the 0% band is already used.

4. Mind the Social Security tax torpedo

Up to 85% of Social Security benefits become taxable once "combined income" (adjusted gross income, plus tax-exempt interest, plus half of your benefits) passes $32,000 for a joint return or $25,000 for a single filer (SSA). Those thresholds have never been indexed for inflation. In the range where benefits are being pulled into tax, each extra dollar of IRA withdrawal can add up to $1.85 of taxable income, so the marginal rate is far higher than the bracket suggests. Drawing the IRA down before benefits begin, and delaying Social Security, keeps more of the IRA income out of that range.

5. Think about who inherits what

Assets in a taxable account generally receive a new cost basis equal to their value at your death (IRS Publication 551), so decades of unrealized gain are never taxed. A traditional IRA gets no such reset. Most non-spouse beneficiaries must empty an inherited IRA within 10 years and pay tax at their own rates, often in their peak earning years (see the 10-year rule). If your children are in higher brackets than you, spending the IRA and leaving them the appreciated taxable account and the Roth is usually the better legacy.

Richard, 66, and Anne, 65, retired last year with $2.4 million: $600,000 in a taxable account, $1.5 million across two traditional IRAs and a rollover 401(k), and $300,000 in Roth IRAs. The house is paid off. They spend $120,000 a year and plan to claim Social Security at 70, when their combined benefit will be about $78,000 a year. Richard was born in 1960, so his RMDs begin at 75.

The straight conventional order would have them live on the taxable account until it ran out around 70, leaving the IRA untouched. At 5% growth, $1.5 million becomes about $2.2 million by the end of the year Richard turns 74, and his first RMD would be about $90,000 (the balance divided by the IRS factor of 24.6), on top of $78,000 of Social Security. Most of that is taxed at 22%, and the RMD grows every year as the IRS divisor shrinks. The bigger risk is the survivor: from the year after one of them dies, the other usually files as a single taxpayer with one Social Security check instead of two but the same IRA. The same RMD then lands in the 24% bracket and above the $109,000 single-filer IRMAA line. Spreading the IRA income across the years from 66 to 75, while both are alive and filing jointly, takes the same money out at 12% and low-22% rates instead.

None of this changes how long the money lasts in the calculator above, which models the portfolio as one pool before tax. It changes how much of each withdrawal you keep. Enter your spending grossed up for tax, and treat tax-aware ordering as a margin of safety on top of the success rate. If you would rather spend only what the portfolio pays out, the dividend calculator compares living off dividends vs. a withdrawal rate.

It models it two ways, and neither assumes a steady return. The Sequence Risk mode takes a set of annual returns that average exactly your expected return, spread evenly from well below it to well above it (the width is set by the volatility you enter), and runs your plan twice: once with the worst years first and once with the best years first. The two runs see the same returns and the same withdrawals. Only the order differs, and the gap between the two outcomes is the cost of bad timing.

The Monte Carlo mode draws 1,000 random sequences of annual returns, one for each year of your plan, from a normal distribution with your average return and volatility, and counts how many of them never run out. In both modes, each year's withdrawal comes out at the start of the year, rises with the inflation rate you enter, and is reduced by any Social Security or pension income from the year it starts. If your pension also offers a lump sum, you can test a pension lump-sum offer against the monthly payment first. The random draws are seeded, so the same inputs always give the same answer.

The reason order matters is that withdrawals turn temporary losses into permanent ones. A retiree who sells shares after a 25% fall has to sell a third more of them to raise the same cash, and those shares are not there for the recovery. A retiree still saving is doing the opposite: buying more shares cheaply. The risk is highest in the first five to ten years, when the balance is largest relative to what remains to be withdrawn. Homeowners 62 and older have one more tool: a reverse mortgage line of credit as a standby reserve, drawn in a bad year so shares are not sold at a loss.

How withdrawal order helps in a bad sequence

Account order and sequence risk meet in a bear market. Three habits limit the damage. Keep two to three years of spending in cash and short-term bonds, or build a CD or Treasury ladder for the next five years of spending, and draw from it instead of selling stocks at the bottom. In the taxable account, sell lots that are at a loss: realized losses offset gains and up to $3,000 a year of ordinary income, with the rest carried forward (IRS Topic 409). And a down year is the cheapest time to convert IRA shares to a Roth, because the same number of shares converts at a lower value and recovers inside the Roth tax-free.