The savings you’ve accumulated in a traditional 401(k) or individual retirement account can provide an important source of income in retirement. But because most withdrawals from tax-deferred accounts are treated as taxable income, it’s important to think carefully about when and how you access those funds.
The timing and sequence of your retirement account withdrawals can affect your tax bill, Medicare premiums and how long your nest egg lasts. Understanding the rules can help you make informed decisions and maximize your retirement savings.
Consider these retirement account withdrawal strategies:
— Take required minimum distributions when necessary.
— Withdraw funds during low-income years.
— Review Roth conversions.
— Coordinate withdrawals across different account types.
— Use charitable giving strategies when appropriate.
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Understand Required Minimum Distribution Rules
A , or RMD, is the minimum amount that must be withdrawn annually from most traditional retirement accounts once you reach the required age. RMDs generally begin at age 73 for individuals born between 1951 and 1959. For those born in 1960 or later, the starting age rises to 75.
Failing to take a required distribution can result in a penalty. However, recent legislation reduced the penalty for missed RMDs, making the consequences less severe. Most retirees must take their first RMD by April 1 following the year they reach their required beginning age. After that, RMDs must be taken by Dec. 31 each year.
“The gap years between retirement and RMD age can be extremely valuable planning years,” says Ryan D. Seufert, co-founder of Silver Grove Financial Group in Orchard Park, New York. “Retirees may be able to use that window for Roth conversions, strategic IRA distributions at lower tax brackets, or capital gain harvesting on assets such as stocks or real estate before RMDs begin.”
Take Advantage of Low-Tax Years
One of the most effective retirement withdrawal strategies is to take distributions during years when your taxable income is relatively low.
“The early retirement years can be an attractive window for intentional IRA distributions or Roth conversions, particularly before RMDs, Social Security, pensions or other income sources fully come online,” says Kevin Prendergast, a partner at Leelyn Smith in Geneva, Illinois.
“If retirees do nothing, those pretax accounts may continue compounding until RMDs eventually force more taxable income than they actually need, potentially pushing them into higher federal brackets, increasing the taxation of Social Security, and affecting Medicare premiums.”
Rather than waiting until RMDs force larger withdrawals, some retirees gradually draw from traditional retirement accounts while remaining in a lower tax bracket. may also provide a regular source of retirement income. By setting up recurring withdrawals, retirees can create a steady income stream that functions much like a paycheck.
Consider Strategic Roth Conversions
A allows you to move money from a traditional retirement account into a and pay the related taxes upfront. While the conversion creates taxable income in the year it occurs, future qualified Roth withdrawals are generally tax-free.
Many retirees spread Roth conversions over several years rather than converting a large balance all at once. Staggering conversions may help limit the amount of income taxed at higher rates and reduce the risk of moving into a higher tax bracket.
Roth accounts also offer additional flexibility because they are not subject to lifetime RMDs for the original account owner.
In addition, the eliminated RMDs from Roth 401(k) and Roth 403(b) accounts beginning in 2024. Previously, retirees often rolled these accounts into Roth IRAs to avoid required withdrawals. That extra step is no longer necessary.
“SECURE Act and SECURE 2.0 changes have made beneficiary planning much more important,” Seufert says. The higher RMD “is significant because it extends the Roth conversion runway for many retirees,” Seufert says. “The extra time before RMDs begin is a planning opportunity, not a reason to delay tax planning.”
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Coordinate Withdrawals Across Multiple Accounts
Many retirees have assets spread across traditional retirement accounts, Roth accounts and taxable brokerage accounts. Rather than relying on a single account for income, some coordinate withdrawals from multiple account types to help manage their taxes more effectively.
“An effective withdrawal strategy should focus on proper tax bracket utilization,” says Andrew Matz, a financial planner at Oak Road Wealth Management in Lee’s Summit, Missouri. “The traditional advice is to first withdraw taxable accounts. While this may be a good rule of thumb, we often find that lower tax brackets should (take advantage of) traditional IRA withdrawals. If large one-time expenses could push you into a higher tax bracket (like going from the 12% to 22% bracket), consider withdrawing from a taxable brokerage account to utilize long-term capital gains treatment or a tax-free Roth IRA distribution rather than taking an ordinary income tax hit.”
Understand the New Rules for Inherited IRAs
Most non-spouse beneficiaries who must fully withdraw the account balance within 10 years of the original owner’s death. Some beneficiaries may also need to take annual RMDs during the 10-year period if the original owner had begun taking them before death.
As a result, beneficiaries may no longer be able to wait until the final year to empty the account. “Reducing the size of your pretax retirement accounts is also important because if your kids inherit a large IRA, they will be forced to empty it in 10 years and may be pushed into higher tax brackets,” says Matz. “Brokerage accounts and Roth IRAs are more ideal legacy vehicles. Roth IRAs remain tax-free to your children, and brokerage accounts receive a step up in cost basis at death, meaning there is normally a small, if any, gain in the account for your kids to pay taxes on.”
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Incorporate Charitable Giving
For retirees who support charitable causes, a qualified charitable distribution, or QCD, can be one of the most tax-efficient withdrawal strategies.
Individuals age 70陆 and older can transfer money directly from an IRA to a qualified charity. The distribution is excluded from taxable income and can help satisfy RMD requirements.
“For charitably inclined retirees, QCDs remain one of the most tax-efficient ways to satisfy RMDs because the distribution can go directly to charity without being included in taxable income,” Seufert says. For 2026, the annual QCD limit is $111,000 per individual.
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Update 06/12/26: This story was published at an earlier date and has been updated with new information.
