Transparent method
The formula
Worked example
Example inputs
How to interpret the result
The taxable-first, tax-deferred-second, Roth-last sequence is a reasonable general default, letting tax-advantaged accounts keep compounding longest, but it isn't universally optimal. A retiree with a large estate-planning goal, or one who wants to smooth taxable income to avoid a bracket jump later, can come out ahead with a deliberately different order.
Before you rely on it
What to check
Model at least one alternative withdrawal order against your specific tax bracket, RMD timing and estate goals, rather than defaulting to the general sequence without checking it against your situation.
The common error
Where people go wrong with retirement withdrawal order calculator
Applying the general taxable-first withdrawal order universally without checking it against personal RMD timing, current bracket and estate goals. The general default is a reasonable starting point, not a rule that fits every retiree's specific situation equally well.
Sensitivity evidence
How annual return changes the estimated years funded
| Annual return | Estimated years funded | Estimated tax paid | Total starting portfolio |
|---|---|---|---|
| 3.0% | 28.0 years | $202,731 | $1,250,000 |
| 4.0% | 35.0 years | $240,409 | $1,250,000 |
| 5.0%worked example | 54.0 years | $299,289 | $1,250,000 |
| 6.0% | 100.0 years | $414,349 | $1,250,000 |
| 7.0% | 100.0 years | $1,404,377 | $1,250,000 |
Every input, tested
Which input moves the estimated years funded most
| Input | Tested from | To | Estimated years funded at each end | Swing |
|---|---|---|---|---|
| Annual return | 4.0% | 6.0% | 35.0 years to 100.0 years | 65.0 years (120%) |
| Annual portfolio spending need | $54,000 | $66,000 | 100.0 years to 38.0 years | 62.0 years (115%) |
| Tax-deferred account balance | $630,000 | $770,000 | 44.0 years to 74.0 years | 30.0 years (56%) |
| Taxable account balance | $270,000 | $330,000 | 48.0 years to 62.0 years | 14.0 years (26%) |
| Roth balance | $225,000 | $275,000 | 49.0 years to 60.0 years | 11.0 years (20%) |
| Tax rate on deferred withdrawals | 18.0% | 22.0% | 57.0 years to 51.0 years | 6.0 years (11%) |
Two variables at once
Estimated years funded by annual return and taxable account balance
| Annual return \ Taxable account balance | $240,000 | $300,000 | $360,000 |
|---|---|---|---|
| 3.0% | 26.0 years | 28.0 years | 30.0 years |
| 4.0% | 31.0 years | 35.0 years | 39.0 years |
| 5.0% | 43.0 years | 54.0 years | 76.0 years |
| 6.0% | 100.0 years | 100.0 years | 100.0 years |
| 7.0% | 100.0 years | 100.0 years | 100.0 years |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Taxable account balance | $300,000 |
| Tax-deferred account balance | $700,000 |
| Roth balance | $250,000 |
| Annual portfolio spending need | $60,000 |
| Tax rate on deferred withdrawals | 20.0% |
| Annual return | 5.0% |
| Estimated years funded | 54.0 years |
| Estimated tax paid | $299,289 |
| Total starting portfolio | $1,250,000 |
Where the inputs come from
Enter the balances of the taxable account, tax-deferred accounts such as traditional IRAs and 401(k)s, and Roth accounts. Annual portfolio spending need is what you plan to draw for living costs, the tax rate on deferred withdrawals is your expected effective rate, and the annual return applies to all balances. Include cost basis in the taxable account if you know it, since only gains are taxed there.
Using the estimated years funded in a real decision
Test different orders and compare the tax paid.
When the result stops applying
The model uses a flat tax rate and steady return, while real taxes are progressive and change over time. It ignores capital gains treatment for the taxable account, RMDs, Medicare surcharges and Social Security taxation, all of which favor different orders. The best order depends on your bracket now and later, your heirs and your expected longevity.
What to compare it with
Use the retirement income tax calculator for the tax on a chosen mix, and the Roth conversion and bracket-fill pages for the blending approach. The RMD calculator shows required withdrawals, and the taxable Social Security page shows the effect on benefits. A tax professional can build a multi-year plan.
People also ask
Frequently asked questions
What is the usual withdrawal order?
Taxable accounts first, then tax-deferred accounts, then Roth accounts, which lets the accounts with the most tax advantage grow longest.
Why blend withdrawals instead?
Taking some deferred money in low-income years fills low brackets and shrinks future RMDs, which can cut total lifetime tax.
Do RMDs override the order?
Yes. Required distributions from tax-deferred accounts must be taken once you reach RMD age, so the plan must include them.