What Order Should You Withdraw From Your Retirement Accounts?

There is no single right order for everyone, but the general idea is to pull from your taxable accounts first, then tax-deferred accounts like a traditional IRA, and leave Roth money for last, while watching how each withdrawal affects your tax bracket, your Social Security taxes, and your Medicare premiums. The order you choose can change how much of your savings you keep over a full retirement.

By Nicholas Bair, CFP^®, ChFC^®

Why Does the Order I Withdraw Money Even Matter?

The order matters because your three types of accounts are taxed in three different ways, so the same dollar costs you a different amount depending on where it comes from. A dollar from a taxable brokerage account, a dollar from a traditional IRA or 401(k), and a dollar from a Roth account each land on your tax return differently.

As we explained in our foundation post, How to Make Your Retirement Savings Last Without Sacrificing Your Lifestyle, the account you draw from can matter as much as the amount you withdraw. This post takes that one idea and goes deeper.

What Are the Three Kinds of Accounts?

Most retirement money sits in one of three buckets, and knowing how each is taxed is the whole game.

• Taxable accounts: a regular brokerage account. You already paid tax on the money you put in, so you are usually taxed only on the gains when you sell, often at lower long-term capital gains rates.
• Tax-deferred accounts: a traditional IRA or 401(k). You got a tax break when you contributed, so withdrawals are taxed as ordinary income now.
• Roth accounts: a Roth IRA or Roth 401(k). You paid tax going in, so qualified withdrawals come out tax-free, and Roth IRAs have no required withdrawals during your lifetime.

So Which Account Should I Spend First?

A common starting point is to spend taxable accounts first, then tax-deferred accounts, then Roth last, because it lets your tax-advantaged money keep growing while you draw down the money that is taxed most lightly. Spending taxable dollars first often keeps your yearly taxable income lower early on, and saving Roth for last gives that tax-free money the most time to grow.

That said, this is a starting point, not a rule. A year with low income might be a good time to pull some from a traditional IRA on purpose, or to do a partial Roth conversion, to "fill up" a lower tax bracket while you can. The right sequence depends on your income, your bracket, and your timeline, which is why withdrawal sequencing is a core part of our tax planning for Arizona retirees.

How Does a Withdrawal Change My Taxes and Medicare?

A large withdrawal from a pre-tax account raises your taxable income for that year, and that single number quietly drives several other costs. When your taxable income goes up, more of your Social Security benefit can become taxable at the federal level (up to 85% of the benefit can be taxable depending on your income), and a higher income can raise your Medicare premiums.

In 2026, the standard Medicare Part B premium is $202.90 per month, and retirees whose income rises above $109,000 (single) or $218,000 (married filing jointly) pay an income-related surcharge called IRMAA on top of it, based on the tax return from two years earlier (Medicare.gov). What that means in plain terms: a big IRA withdrawal or Roth conversion this year can raise your Medicare bill two years from now, so the size and timing of each withdrawal is part of the decision, not an afterthought.

Does Arizona Change the Math?

Arizona keeps the state side simple, so the bigger lever in your withdrawal plan is almost always federal. Arizona applies a flat 2.5% state income tax and fully exempts Social Security benefits from state tax under A.R.S. § 43-1022, and it has no estate or inheritance tax.

Because withdrawals from IRAs, 401(k)s, and pensions are taxed by Arizona at just 2.5%, the heavy lifting in sequencing is about managing your federal bracket, your federal Social Security taxation, and your Medicare premiums. For snowbirds who split the year between states, where you are a legal resident also affects which state taxes your income, which is one more reason to plan the timing deliberately.

When Is the Best Time to Shift the Order on Purpose?

The window between the day you retire and the year required minimum distributions begin is often the best time to manage your bracket on purpose. Required minimum distributions from most pre-tax retirement accounts currently begin at age 73 under federal law (IRS), and once they start, you must take taxable withdrawals whether or not you need the money.

During that earlier window, your income may be lower, which can create room to draw from a traditional IRA or convert some of it to Roth at a lower rate, lowering the required withdrawals waiting for you later. This is also a natural time to organize old workplace accounts, and your options for rolling over a former 401(k) can affect how cleanly you manage withdrawals once income starts. That window closes on a federal schedule, so it is worth planning for before it arrives rather than after. We cover how claiming decisions fit alongside these withdrawals in part 2 of this series, on when to claim Social Security in Arizona  /blog/when-should-you-claim-social-security-in-arizona].

This information is general and educational, current as of 2026, and is not intended as tax or legal advice. Medicare figures change annually. A Roth conversion may not be suitable for every investor and generally creates taxable income in the year it occurs. Please consult your tax or legal professional regarding your individual situation.