Retirees Who Spend From the Wrong Account First Run Out About Three Years Sooner. Here’s the Order That Adds Six Figures.

Withdrawing from the wrong account first can shorten a retiree's portfolio life by three years and cost six figures in lifetime wealth.

Draining the taxable brokerage first lets the traditional IRA grow unchecked, forcing larger RMDs that can push retirees into the 22% bracket at 73.

The optimal fix is filling the 12% bracket with IRA withdrawals or Roth conversions before RMDs begin, while harvesting taxable gains at 0%.

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This is only one modeled scenario, and the outcome is highly sensitive to the assumptions you plug in. Take a 65-year-old couple with $1.5 million split roughly a third each across a taxable brokerage, a traditional IRA, and a Roth. They spend about $78,535 a year, which is the average consumer expenditure, and they earn a 6% return with 2.5% inflation. Filing jointly in the 12% bracket, a naive withdrawal sequence can shorten portfolio longevity by about three years, while an optimized strategy preserves six figures of additional wealth over a 30-year retirement.

Change any of those inputs, the asset mix, the spending level, or the tax bracket, and both numbers shift significantly. A retiree with nearly everything concentrated in a single account type will see almost no impact at all.

That caveat matters because the common advice is a strict order. Taxable first, then tax-deferred money like traditional IRAs and 401(k)s is taxed as ordinary income on withdrawal, and Roth last. The logic makes sense at first glance. Tax-advantaged accounts get more years to compound, and taxable withdrawals often qualify for long-term capital gains rates, which are lower than ordinary income rates.

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Draining the brokerage first while the traditional IRA keeps growing sets up a bigger problem later. Required minimum distributions, the IRS-mandated annual withdrawals from tax-deferred accounts, now begin at age 73 for those born between 1951 and 1959, and age 75 for those born in 1960 or later. A larger IRA at 73 means a larger forced withdrawal, which can push a retiree from the 12% bracket into the 22% bracket, which starts at $100,800 for joint filers in 2026.