Retirement is not just about accumulating money—it’s about turning those savings into a sustainable income stream in a smart way. Many retirees in Florida have diligently saved through 401(k)s, IRAs, Roth IRAs, and taxable accounts. Still, when it comes time to withdraw, the lack of a strategy can create unexpected tax burdens and derail their retirement dreams.

As a Fee-Only Fiduciary hourly financial advisor in Boca Raton, I have had the opportunity to see firsthand in hundreds of consultations the value that a carefully crafted withdrawal sequence adds. This strategy isn’t about timing the stock market—it’s about timing your withdrawals in a tax-efficient way. By coordinating withdrawals across taxable, tax-deferred, and tax-free accounts, retirees can extend the life of their savings by years, potentially saving thousands in unnecessary taxes.

This blog explores how withdrawal sequencing works, why it matters, and the strategies you can apply to make your retirement more secure. Whether you’re looking for ongoing guidance or prefer an hourly consultation, a personalized approach ensures that you stay on track.

Ready to plan your retirement withdrawals?

1. Understanding the Different Types of Retirement Accounts

The foundation of any withdrawal strategy is understanding the types of accounts you own:

• Taxable Accounts: These include brokerage accounts or bank savings. They are taxed annually on interest, dividends, and capital gains.
• Tax-Deferred Accounts: Traditional IRAs, 401(k)s, and similar vehicles allow contributions and growth without annual taxation, but withdrawals are fully taxed as income.
• Tax-Free Accounts: Roth IRAs and Roth 401(k)s allow after-tax contributions, but qualified withdrawals are tax-free. They also avoid Required Minimum Distributions (RMDs) during the owner’s lifetime.

Each account type has its advantages, but when combined strategically, they create opportunities for tax efficiency.

2. The Concept of Withdrawal Sequence

Withdrawal sequence refers to the order in which retirees take money from their different accounts. It may sound simple, but it has profound implications. For example, withdrawing heavily from tax-deferred accounts early can push retirees into higher tax brackets, triggering larger tax bills and even higher Medicare premiums due to IRMAA.

On the other hand, withdrawing only from taxable accounts might preserve IRAs for later—but could increase capital gains exposure. The right balance ensures that retirees smooth their tax liabilities over time. The goal is not only to minimize taxes today but to prevent massive tax bills in later retirement when RMDs become unavoidable.

3. Proven Retirement Strategies: The Advantage of the Traditional Approach

In retirement planning, the sequence of your withdrawals can significantly impact your long-term financial well-being. Conventional wisdom has long dictated a clear, phased approach to managing assets: start with taxable accounts, progress to tax-deferred growth accounts, and then take advantage of the unique benefits of tax-free Roth accounts. This traditional methodology not only simplifies management but also offers predictable benefits to your tax strategy.

We believe in the soundness of this approach, especially for those seeking clarity and efficiency in an ever-changing tax landscape. By following a logical sequence of withdrawals, you can better control your annual tax liability, plan with greater certainty, and preserve the tax-free growth of your Roth accounts for the future or for your heirs. This methodical approach enables you to maintain accumulated wealth for a longer period in tax-protected environments, thereby optimizing your legacy.

While the legislative environment (such as the SECURE 2.0 Act) and market conditions evolve, the discipline and predictability of a well-structured, traditional retirement strategy remain fundamental pillars of many successful retirement plans. Our priority is to ensure that every withdrawal contributes to your overall financial security and the longevity of your wealth.

Here are several strategies retirees can use to optimize withdrawals:

• Filling the Bracket: Withdraw just enough from tax-deferred accounts to stay within a lower tax bracket, while covering the rest of your expenses with taxable or Roth funds.
• Avoiding the Tax Torpedo: Social Security benefits become taxable when combined income exceeds certain thresholds. Strategic withdrawals can minimize the portion of benefits that are taxed.
• Managing IRMAA: Medicare premiums increase if your income surpasses specific thresholds. By planning withdrawals carefully, retirees can avoid unnecessary surcharges.
• Roth Conversions: Moving funds from a Traditional IRA to a Roth IRA in lower-income years can lock in today’s tax rates, creating future tax-free income.

A couple in Boca Raton with $1 million in retirement accounts might save tens of thousands over 20 years by using these strategies instead of withdrawing without a plan.

5. RMDs and Their Impact on Withdrawal Order

RMDs represent one of the biggest challenges in retirement planning. Beginning at age 73 (and 75 starting in 2033), retirees are forced to withdraw a percentage of their tax-deferred accounts each year. These withdrawals are taxable, and failing to take them results in steep IRS penalties.

Without planning, retirees may find themselves with ballooning RMDs that push them into higher brackets. One solution is to begin modest withdrawals or Roth conversions before RMDs start. Another is to use Qualified Charitable Distributions (QCDs), which allow retirees to transfer funds directly to charity without increasing taxable income.

This not only satisfies RMD requirements but can also support philanthropic goals.

Need help managing RMDs?

Roth IRAs are often considered the crown jewel of retirement accounts. Withdrawals are tax-free, and they have no RMDs during the owner’s lifetime. This makes them ideal for late retirement spending or leaving assets to heirs.

In addition, Roth conversions allow retirees to pay taxes now, at known rates, instead of gambling on potentially higher future rates. With the current tax cuts set to expire in 2026, this window of opportunity is beautiful.

For estate planning, Roth IRAs also offer more flexibility to beneficiaries, since inherited Roth accounts are not subject to the same heavy tax burdens as traditional accounts.

Case Study A: John, a 72-year-old retiree, withdraws only from his IRA. Within a decade, his RMDs skyrocket, pushing him into higher brackets and causing his Medicare premiums to double. His portfolio depletes faster than expected.

Case Study B: Susan, also 72, works with a Fee-Only CERTIFIED FINANCIAL PLANNER®, she blends withdrawals, does modest Roth conversions in her 60s, and times taxable account withdrawals strategically. Over 20 years, she has saved more than $100,000 in taxes, and her portfolio has lasted significantly longer.

These contrasting examples highlight how strategy—not just savings—defines retirement success.

• Taking withdrawals without considering long-term tax impact
• Ignoring Medicare surcharges caused by higher income
• Triggering unnecessary taxation of Social Security
• Believing withdrawal sequence doesn’t matter
• Not consulting a Fee-Only Fiduciary advisor for objective guidance

Many retirees also hesitate to seek professional help because they think it requires giving up investment management. However, Fee-Only Fiduciary planners in Boca Raton often offer hourly or project-based consultations, allowing retirees to get the advice they need without committing to ongoing services.

9. How to Personalize Your Withdrawal Strategy

There is no universal withdrawal strategy. What works for one retiree may not work for another. Personalized planning considers factors such as:

• Your current and future income levels
• Life expectancy and health concerns
• Goals for leaving a legacy to heirs
• Risk tolerance and investment mix.

A Fee-Only Fiduciary advisor in Palm Beach can help design a strategy tailored to these unique needs. Hourly consultations can be beneficial for retirees who want professional input without the commitment of full-service management.

Withdrawal sequencing is one of the most overlooked aspects of retirement planning. A poor strategy can lead to higher taxes, reduced benefits, and a shorter retirement. By contrast, a thoughtful plan—developed with the guidance of a Fee-Only Fiduciary—can extend your savings and give you peace of mind.

Many retirees are turning to fiduciary advisors who act solely in the client’s best interest. Whether through comprehensive planning or hourly sessions, the right advice can safeguard your financial future.

Don’t let unnecessary taxes erode your hard-earned savings. Take the time to build a tax-efficient withdrawal strategy today.

Start Your Retirement Plan Today!

Alonso Rodriguez Segarra – CERTIFIED  FINANCIAL PLANNER®

Which provides hourly, fee-only, and fiduciary financial planning services. He has over 25 years of experience in the financial world and has been named among the Top 100 Financial Advisors in the US by Investopedia and by etf.com

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Note: The comments given in this guide are for educational purposes only. Before    making a financial decision, consult your financial advisor or conduct appropriate research. Remember that historical results are not a guarantee of future returns. In    the comments provided, this guide does not consider tax impacts. Always consult your particular case with a specialist. We are not your financial advisor, so remember that each case differs.

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All rights to this guide are reserved, and the occasional mention of third-party brand names is made solely for educational and reference purposes, without any interest in financial gain. This information is for educational purposes only and does not represent an offer of products or services.