Compare withdrawal sequences across three retirement buckets.
Conventional sequence: total tax
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Reverse sequence: total tax
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Savings
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Your breakdown
Updates live as you type| Bucket | Balance | Rate | Lifetime tax |
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Why drawdown order is supposed to matter
Retirees typically hold money in three tax buckets: taxable brokerage accounts, tax-deferred accounts such as a Traditional IRA or 401(k), and tax-free Roth accounts. The order you tap them in is one of the most discussed levers in retirement planning. The conventional teaching is to spend the taxable account first, the tax-deferred account second, and the Roth last. The logic is intuitive: pay capital gains rates on the taxable account now, let the tax-deferred balance keep growing while you defer the ordinary-income hit, and protect the tax-free Roth so it compounds untouched for as long as possible, ideally passing to heirs income-tax-free.
This calculator models that conventional sequence against the exact opposite, draining the Roth first and the taxable account last, and reports the total tax each path generates over a 40-year horizon. It applies a 15 percent long-term capital gains rate to the taxable bucket, your chosen marginal rate to the tax-deferred bucket, and zero to the Roth.
What a flat-rate model can and cannot show
Here is the honest and slightly surprising result you will often see: when the portfolio is large enough to fund your spending but small enough to be fully drawn down within the horizon, the conventional and reverse sequences produce the same total nominal tax. The savings figure reads zero. That is not a bug. Under a single flat marginal rate, every dollar pulled from the tax-deferred bucket is taxed at that same rate whether you withdraw it in year one or year twenty. Reordering the buckets changes when you pay, not the lifetime total. The tool deliberately isolates that timing effect so you can see it clearly.
The real-world advantage of the conventional order comes from forces this flat-rate model does not simulate: keeping taxable income low enough to stay in a lower bracket, avoiding the income-related Medicare premium surcharges known as IRMAA, smoothing required minimum distributions before they balloon, and giving the Roth more years of tax-free compounding. Those are bracket and growth effects, and a constant-rate, no-growth model cannot capture them. One edge case is worth noting: if your balances are so large they cannot be spent down within 40 years, the flat-rate comparison actually flips, which is a signal that you need to model brackets explicitly rather than trust a single rate.
Draining three buckets at $80,000 a year
Take the default scenario: $300,000 taxable, $1,000,000 tax-deferred, and $300,000 Roth, withdrawing $80,000 a year at a 22 percent marginal rate. Because the whole portfolio drains well within 40 years, the total tax is identical whichever order you choose, and it is easiest to see as a per-bucket calculation. The taxable account pays 15 percent, the tax-deferred account pays 22 percent, and the Roth pays nothing. The lifetime total is $265,000, and the conventional-versus-reverse savings is zero.
The real levers the math leaves out
Use this tool to internalize the principle and the bucket-by-bucket cost, then plan around the things it cannot model. In practice the highest-value moves happen in the gap years between retiring and the start of required minimum distributions at age 73. That is when many retirees deliberately fill up the lower brackets with tax-deferred withdrawals or Roth conversions, paying tax voluntarily at 10 or 12 percent to shrink a Traditional balance that would otherwise force large taxable distributions later. The taxable account also carries a quiet advantage at death: heirs receive a step-up in basis, so unrealized gains can escape income tax entirely, which is part of why spending it during life is the textbook starting point.
This calculator suits a do-it-yourself retiree or a saver years out who wants to understand sequencing before meeting an advisor. It is a teaching model, not a tax return. For an actual plan you will want software or a professional that layers in your real federal brackets, state tax, Social Security taxation, and IRMAA thresholds. The order is a starting framework, and the bracket work is where the dollars are won.
Do required minimum distributions override my chosen order?
Yes. Once you reach the RMD age of 73, the IRS forces a minimum withdrawal from your Traditional accounts each year under Pub 590-B tables, whether or not your sequence calls for it. A large pre-tax balance left untouched too long can produce RMDs big enough to spike your bracket, which is exactly why front-loading some tax-deferred withdrawals earlier can pay off.
Where does Social Security fit into the sequence?
Delaying Social Security to age 70 raises the benefit by about 8 percent for each year past full retirement age, and the gap years before it starts are prime territory for low-bracket Traditional withdrawals or conversions. Coordinating the claiming decision with your withdrawal order usually matters more than the order alone.