What order should I withdraw from my accounts?
The account you tap first can change how much tax you pay and how long your money lasts. Enter your balances to see the tax-aware drawdown order Planomy's engine uses — cash first, tax-free Roth and HSA last — and why. Everything runs in your browser.
A general rule of thumb, not tax advice. The best order depends on your bracket, RMDs, Social Security timing, and state taxes — talk to a professional before large withdrawals.
Why this order?
The goal is to spend the least-costly dollars first and let tax-free accounts keep compounding as long as possible:
- Cash first — already taxed, earns little, no market risk to realize.
- Taxable brokerage next — you're only taxed on gains, often at lower long-term capital-gains rates.
- Traditional (pre-tax) 401k/IRA — fully taxed as income, so drain it before Roth; doing so also shrinks future required minimum distributions.
- Roth last — tax-free growth and no RMDs, so it's the most valuable to leave untouched (and to inherit).
- HSA last of all — tax-free for medical costs; save it for later-life healthcare.
The 59½ rule of thumb
Withdrawing from tax-advantaged accounts (traditional and Roth earnings) before age 59½ generally triggers a 10% early-withdrawal penalty on top of any income tax — so before 59½, lean on cash and taxable accounts first, and use retirement accounts only through specific exceptions (72(t), Roth contribution basis, etc.).
Frequently asked questions
What is a tax-aware withdrawal order?
A tax-aware withdrawal order is the sequence you use to draw from cash, taxable brokerage, tax-deferred, Roth, and HSA accounts. The goal is to fund spending while managing taxable income and preserving the most flexible accounts for later.
Should I always spend taxable accounts before retirement accounts?
Not always. Taxable accounts are often used early because only gains are taxed, but retirees may deliberately fill low tax brackets with traditional IRA or 401(k) withdrawals before RMDs begin. The right order depends on your age, tax bracket, and account mix.
Does this replace personalized tax planning?
No. This calculator gives a planning framework, not tax advice. Real withdrawal plans can change because of RMDs, Medicare IRMAA, Social Security taxation, state taxes, and estate goals.
Build your full plan in Planomy
Free, private, and running entirely in your browser. Planomy models this withdrawal order across your real accounts — no account required.
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