Withdrawal Sequencing Calculator — Methodology

How This Calculator Works

The order in which you draw from taxable, traditional (pre-tax) and Roth accounts changes how much tax you pay over retirement. This calculator simulates four orders year by year from your retirement age to 95, applying required minimum distributions (RMDs), Social Security taxation and federal and state income tax, and compares total lifetime tax and the ending portfolio.

1. Proportional: withdraw from all three account types in proportion to their balances.
2. Traditional first: traditional, then taxable, then Roth.
3. Roth first: Roth, then taxable, then traditional.
4. Bracket-filling: take traditional withdrawals until taxable income, counting the Social Security those withdrawals make taxable, reaches the top of the 12% federal bracket; then cover the rest of the year's need (spending not met by Social Security and pension, plus the year's tax) from Roth, then taxable, then more traditional if still short.

Which Strategy Is Recommended

The strategy marked Recommended is worked out each time from the inputs entered; no strategy is recommended in advance. First, how long the money lasts: an order whose money never runs out before 95 ranks above one that does, and a later age above an earlier one. Then, among the orders that last longest, the lowest total lifetime tax (federal plus state, summed over the years from your retirement age to 95). If two of those have exactly the same lifetime tax, the one listed first above is marked. The figure shown is the recommended strategy's lifetime tax subtracted from that of proportional withdrawals (strategy 1). It is $0 when proportional is itself recommended, and it is shown as extra tax, never as a saving, if the recommended order pays more than proportional because it lasts longer. When an order pays less tax but runs out of money sooner, the result names it.

Recommended means the order whose money lasts longest. If more than one lasts as long, it is the one of those with the lowest total income tax over the years shown. It does not count tax still owed on traditional savings left at the end.

Inputs and Assumptions

• Balances: Traditional, Roth and taxable, plus the cost basis of the taxable account.
• Social Security and pension: Monthly benefit and claiming age, and annual pension. Both rise with inflation.
• Annual spending: In today's dollars, rising with inflation. Withdrawals cover spending not met by Social Security and pension, plus the year's income tax.
• Filing status and state: Select the 2026 federal brackets and standard deduction, and the state tax rules.
• Expected return and inflation.

Assumptions: the simulation starts at your retirement age with today's balances. Withdrawals happen first each year, then the remaining balances grow at the expected return.

Formula

each year, each strategy:
  need = spending × (1+inflation)^t − SS − pension + tax
         (the tax depends on the withdrawals that pay it:
          solved by repeating until it stops changing)

  RMD  = traditionalBalance / UniformLifetimeDivisor(age)
         from age 73 (born ≤ 1959) or 75 (born ≥ 1960)
  traditional withdrawal = max(strategy's choice, RMD)
  every strategy withdraws at least the need while money remains;
  anything withdrawn beyond the need (an RMD above it, or
  bracket-filling) is reinvested in the taxable account at cost

  taxable gain  = taxableWithdrawal × (1 − basis / value)
                  (basis and value as they stand that year, after
                  last year's growth; the basis leaves in proportion
                  to the value withdrawn)
  taxable SS    = IRC §86, IRS Pub. 915 Worksheet 1:
                  provisional = other income + 50% of SS
                  amounts $32,000/$44,000 married filing jointly;
                  $25,000/$34,000 single, head of household and
                  qualifying surviving spouse; $0/$0 married
                  filing separately (living together), so
                  min(85% × provisional, 85% × SS)
  taxableIncome = traditional + pension + taxable SS
                + taxable gain − standardDeduction
  tax           = federal(taxableIncome) + state(taxableIncome)

  IRMAA flag if gross income > $109,000 single
                              / $218,000 joint

// Bracket-filling target (2026): taxable income at the top of the 12% bracket,
//   $50,400 single, $100,800 married filing jointly
//   (standard deduction $16,100 / $32,200)
// extra traditional X: pension + RMD + X + taxableSS(X) − deduction = target
//   taxable SS rises with X, so X is found by bisection

Data Sources

• IRS Revenue Procedure 2025-32 — 2026 federal brackets and standard deductions, via our shared tax data module.
• Treas. Reg. §1.401(a)(9)-9(c) (IRS Publication 590-B, Table III) — Uniform Lifetime Table RMD divisors.
• SECURE 2.0 Act of 2022, §107 — RMD start age 73 or 75 by birth year.
• Internal Revenue Code §86 — taxation of Social Security benefits; the provisional-income thresholds are fixed in the statute and not inflation-indexed.
• CMS (2026) — Medicare Part B IRMAA first-tier thresholds.
• State revenue departments, tax year 2026 (Tax Foundation's 2026 state rate table as cross-check) — state income-tax brackets, held in our shared state tax data module. States without confirmed 2026 figures use their latest published schedule: California, Idaho, North Dakota, Rhode Island, Vermont and Wisconsin (2025).

Limitations

• Capital gains are taxed as ordinary income. Gains from the taxable account are added to ordinary income rather than taxed at the 0%/15%/20% long-term rates, which overstates tax on strategies that draw from the taxable account.
• Average cost basis. Basis leaves the taxable account in proportion to the value withdrawn, which is average-cost basis. The regulations allow the average basis method for shares of a regulated investment company, such as a mutual fund, and for dividend-reinvestment-plan shares (26 CFR 1.1012-1(e)(1)). Other shares sold without naming the lot are charged against the earliest lot bought (first in, first out, 26 CFR 1.1012-1(c)(1)(i)), and you can instead name the lots you sell (specific identification). Either can give a larger or smaller gain than shown.
• Each year's tax is paid from that year's withdrawals, in the strategy's own order, so tax not paid stays invested. The ending portfolio mixes pre-tax (traditional) and after-tax dollars: tax still owed on a traditional balance left at 95 is not counted, which flatters strategies that leave more in traditional accounts.
• Lifetime tax is a plain sum of each year's tax. Tax paid early costs more growth than the same tax paid late, so the strategy with the lowest lifetime tax does not always end with the largest portfolio.
• Federal brackets, the standard deduction and the Social Security amounts stay at their 2026 levels every year, while spending, Social Security and pensions rise with inflation, so the room in each bracket shrinks in real terms over time for every strategy. (The Social Security amounts are fixed in law; the brackets and deduction are indexed in reality.)
• Married filing separately is treated as living with your spouse at some time in the year (Social Security base amount zero).
• The simulation does not grow balances between today and your retirement age, and year labels count from the current year. Enter today's balances as of retirement if you are not yet retired.
• Gains are not included in provisional income for Social Security taxation, and tax-exempt interest is ignored.
• The IRMAA check is a flag on the current year's income; it does not apply Medicare's two-year lookback or add the surcharge to the cost.
• Roth conversions, the age-65 additional deduction, the temporary senior deduction, the Net Investment Income Tax and early-withdrawal penalties before 59½ are not modelled.
• State tax uses 2026 state brackets (California, Idaho, North Dakota, Rhode Island, Vermont and Wisconsin (2025) on their latest published schedule) applied to federal taxable income.
• A single constant return is assumed for every account.

Last Updated

15 October 2026 — Recommended now looks first at how long each order's money lasts, then at lifetime tax. Ranking by lifetime tax alone could mark an order that pays less partly because its money runs out sooner: with the default inputs, a 4% return and $70,000 of spending, traditional-first paid the least ($92,162) and was marked, but its money ran out at 85, a year before bracket-filling's ($95,069, to 86). Bracket-filling is now marked, and the result names traditional-first as the order that pays less but runs out sooner.

14 October 2026 — The calculator is back on the site after an independent re-check of the changes below. The re-check worked its tax, Social Security and RMD figures out again from IRS Revenue Procedure 2025-32, Publication 915 and Publication 590-B, and the calculator matched them.

14 October 2026 — The taxable account's gain now uses its basis share after each year's growth, as the formula above says. It used the share from before the growth, so after the first year the gain on each taxable withdrawal was understated whenever the account had grown (Roth first, $100,000 taxable at a $50,000 basis growing 10%: the second year's tax was $936.84, now $1,181.73). Lifetime totals for strategies that draw on the taxable account move up or down, because a higher tax in one year changes what is left to grow. With the default inputs the change can be several thousand dollars: at $70,000 of spending, bracket-filling's total moves from $158,118 to $154,604, $3,514 lower. With the default inputs at $60,000, traditional-first now pays the least ($122,728 against $124,666 for bracket-filling).

14 October 2026 — The Recommended strategy is now the one with the lowest lifetime tax for your inputs. It used to be bracket-filling every time, and the result showed bracket-filling's saving against proportional withdrawals, or $0 when it had none: with the calculator's default inputs, traditional-first pays the least tax at $60,000 to $110,000 of spending (at $90,000, $102,747 against $148,498 for bracket-filling), yet bracket-filling was marked. Strategy 4 is renamed from Bracket-Optimized to Bracket-Filling.

October 2026 — Three corrections. Each year's tax is now paid from the portfolio: it was worked out but never withdrawn, so every strategy ended with the same total and a lower tax could not stay invested. Bracket-filling now stops at the top of the 12% bracket counting the Social Security its own withdrawals make taxable; it used to size the room first and then run into the 22% bracket (single, age 70, $24,000 of Social Security: $66,500 withdrawn and $10,288 of tax, now $46,100 and $5,800). And the Social Security rules now follow IRS Publication 915 for married filing separately (the lesser of 85% of provisional income and 85% of benefits, not always 85% of benefits) and for a qualifying surviving spouse ($25,000 / $34,000, not the joint amounts).

October 2026 — Bracket-filling now covers your spending. It subtracted Social Security and pension from your spending twice, so it withdrew up to that much too little each year (for $150,000 of spending with $30,000 of Social Security and a $60,000 pension, it withdrew nothing instead of $60,000), which also made its tax look lower. And money withdrawn beyond a year's spending, by bracket-filling or by an RMD larger than your spending, used to drop out of the portfolio; it is now reinvested in your taxable account.

October 2026 — Methodology page published. RMDs corrected: the engine's own copy of the Uniform Lifetime Table was shifted by one year from age 81, understating every RMD from 81 onward, and RMDs started at 73 for everyone. Both now come from a shared data module, with the SECURE 2.0 start age of 75 for those born in 1960 or later.