The right way to access money in retirement

Deciding where to withdraw money from in retirement—whether from taxable, tax-deferred, or tax-free accounts—is one of the most complex financial decisions retirees face. The order in which withdrawals are made can have a major impact on taxes, investment growth, and how long savings ultimately last. Yet there’s no one-size-fits-all answer, because each type of account interacts differently with tax laws and income needs.

Taxable accounts, such as brokerage or savings accounts, are often the most flexible, but withdrawals can trigger capital gains taxes. Tax-deferred accounts like traditional IRAs and 401(k)s offer years of tax-deferred growth, but distributions are taxed as ordinary income and may push retirees into higher tax brackets. Meanwhile, Roth accounts are generally tax-free on withdrawal, but using them too early could reduce future tax-free growth that might be valuable later in retirement.

Adding to the complexity are factors such as required minimum distributions (RMDs), the timing of Social Security benefits, and Medicare premium thresholds. Each of these can affect how much a retiree owes in taxes or even how much they receive in benefits. Market conditions also play a role—drawing from investments that have recently lost value can lock in losses and reduce long-term returns.

Coordinating all of these moving parts is challenging, particularly as retirees juggle competing goals: minimizing taxes, preserving assets, and maintaining a steady income stream. Even small mistakes can have ripple effects that compound over time. Because of this, financial planners often stress the importance of viewing withdrawal strategies not just as a tax question, but as a broader part of overall retirement planning. Knowing when and where to take money can be just as important as how much to withdraw—yet getting it right requires balancing tax rules, income needs, and future uncertainties.

In this episode, Bryan Jepson, MD, CFP, discusses solutions that might work for you.

Disclaimer: this content is intended for general educational purposes only and should not be considered specific financial advice. You should always consult with your personal financial advisor to see how it might fit within your personalized financial plan.