Guides › Retirement Withdrawals
Updated July 30, 2026. Quick answer (2026): Once RMDs begin they are not part of the decision. The distribution happens, taxed as ordinary income, whether or not it is the cheapest dollar available. Ordering only applies to spending above the RMD.
Once RMDs start, the planning moved upstream.
The size of the distribution was set years earlier. What is left is managing around it.
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An RMD is not a withdrawal strategy
Once required minimum distributions begin, the distribution is going to happen. It is taxed as ordinary income whether or not that is the cheapest dollar available, and no amount of sequencing changes it. What remains a decision is only the spending above the RMD.
Which usually makes the rest of the year cheaper, not dearer
Because the RMD has already filled part of your income, the marginal dollar after it may sit in a higher bracket — which strengthens the case for sourcing the remainder from taxable, where only the gain is taxed. On an $80,000 need with a $45,000 RMD at a 24% rate, the RMD costs $10,800 and sourcing the last $35,000 from a taxable account with a 40% embedded gain adds $2,100, for $12,900 in total.
When the RMD exceeds what you need
Then the sequencing question disappears entirely for that year. You take the RMD, pay ordinary income tax on all of it, and the surplus simply lands in your taxable account. Nothing further is withdrawn, and any tool that suggests otherwise has misunderstood the constraint.
The planning happens years earlier
The size of the RMD is set by a balance you can only influence before distributions begin. Reducing it is a job for the pre-RMD years, through conversions or earlier withdrawals, and is covered in reducing RMDs before they start.
Related
Methodology
- This is a single-year, deterministic comparison of the marginal tax cost of one more dollar from each account type. It does not project returns, future brackets, or a lifetime drawdown path, because those depend on assumptions no calculator can verify.
- Every rate is a USER INPUT. Ordinary brackets, long-term capital gain brackets and IRMAA tiers are all indexed annually, so none of them is hardcoded anywhere in this cluster.
- A required minimum distribution is taken first because it is mandatory, not because it is cheapest. Roth is placed last regardless of the single-year arithmetic, which would otherwise drain it first.
- Figures were computed by two independently written engines that agree to the cent, with invariants asserting RMD-first ordering, Roth-last ordering, and that a shortfall is reported rather than silently satisfied.
- Federal only, and excludes state tax, the taxation of Social Security benefits, and ACA premium credits.
Educational estimate, not tax advice. Confirm anything that changes a filing or distribution decision with a CPA.
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