Retirement Withdrawal Strategy

A CFP® Professional Answers the Questions Retirees Ask Most

A retirement withdrawal strategy is the part of retirement nobody teaches you. Most people spend 30 or 40 years figuring out how to put money into retirement accounts, and almost nobody learns how to take it out.

That gap is where I spend most of my time with clients. I’m Joseph Carbone, Jr., CFP®, founder of Focus Planning Group, LLC, a fiduciary financial planning firm in Bayport, New York, serving clients nationwide. I call this work tax distribution planning, and it’s one of the six projects inside my Focus on Retirement Blueprint System. It’s also one of the most common reasons people hire me by the hour. The questions repeat themselves so consistently that I decided to answer them all in one place.

These are the actual questions clients bring to me, answered the way I answer them across the table.

Which Accounts Should I Withdraw From First in a Retirement Withdrawal Strategy?

The conventional answer is to withdraw from taxable accounts first, then tax-deferred accounts like traditional IRAs and 401(k)s, and Roth accounts last. And for some people, that order works fine.

But here’s what I see in practice: the conventional order often leaves the years between retirement and RMD age wide open. Say you retire at 62 and live off your brokerage account. Your taxable income drops into a low bracket for a decade. Those low-income years are some of the most valuable tax real estate you’ll ever have, and spending them doing nothing with your IRA can be a missed opportunity.

For many of my clients, the better retirement withdrawal strategy is a blended approach. We fill the lower tax brackets each year with IRA withdrawals or Roth conversions, cover the rest of their spending from taxable accounts, and preserve the Roth for later. The right mix depends on your account balances, your spending, and when you claim Social Security, which is exactly what we map out together, usually in one or two hourly sessions.

When do RMDs start, and how are they taxed?

Required minimum distributions currently begin at age 73 if you were born between 1951 and 1959, and at age 75 if you were born in 1960 or later. Each year’s RMD is calculated by dividing your prior December 31 account balance by an IRS life expectancy factor, and you pay income tax on the withdrawal.

Miss an RMD and the penalty is steep: 25% of the amount you failed to withdraw, though it can be reduced if you correct the mistake promptly.

The bigger issue I see with RMDs is what I call the “RMD surprise.” A client arrives at 73 with $1.5 million in a traditional IRA, and suddenly the IRS dictates a withdrawal of $55,000 or more each year, whether they need the money or not. That income can push them into a higher bracket, raise their Medicare premiums through IRMAA surcharges, and make more of their Social Security taxable. All of it was avoidable with a withdrawal strategy built in their 60s.

Should I do a Roth conversion before RMDs start?

For a lot of retirees, yes, and the window between retirement and RMD age is usually the best time to do it.

A Roth conversion means moving money from a traditional IRA to a Roth IRA and paying tax on the converted amount now. In exchange, that money grows tax-free, comes out tax-free, and never generates an RMD during your lifetime.

The math works when you can convert at a lower tax rate today than you’d pay on withdrawals later. If you retire at 62 and delay Social Security, you might have several years sitting in the 10% or 12% bracket. Converting each year enough to fill those brackets, without spilling into the next one, is one of the most reliable tax wins in retirement planning.

It’s also easy to overdo. Convert too much in one year, and you can trigger Medicare surcharges or push yourself into a bracket that erases the benefit. When clients hire me for this, we build a year-by-year conversion schedule with specific dollar targets, and we revisit it annually because the brackets and your income both move.

How do I avoid paying more tax on Social Security because of my withdrawals?

Up to 85% of your Social Security benefit can become taxable depending on your other income, and IRA withdrawals count toward that calculation. For the full breakdown of how this is calculated, see our piece on how Social Security benefits get taxed.

This is one of the most common collision points in retirement. A withdrawal that looks harmless on its own can drag more of your Social Security into taxable territory, so the effective tax rate on that withdrawal ends up much higher than your bracket suggests.

The fix is coordination. Sometimes that means drawing from taxable accounts in years when you want to keep Social Security taxation low. Sometimes it means doing Roth conversions before you claim benefits, so your later withdrawals come from tax-free money. There’s no universal answer, so I run the numbers for each client’s situation instead of handing out rules of thumb.

What is a qualified charitable distribution, and should I use one?

If you’re 70½ or older and you give to charity, a qualified charitable distribution (QCD) may be the most tax-efficient gift you can make. A QCD sends money directly from your IRA to a qualified charity. It counts toward your RMD for the year, but it never touches your taxable income. For 2026, the limit is $111,000 per person.

I bring this up with any client who is already giving to their church, alma mater, or a cause they care about while also taking RMDs they don’t fully need. Writing a check from your bank account gets you a deduction only if you itemize. A QCD works whether you itemize or not, and it keeps the income off your return entirely, which also protects your Medicare premiums.

Can I hire a financial planner hourly just for a retirement withdrawal strategy?

Yes. At Focus Planning Group, you can hire me by the hour for exactly this and nothing else. Hourly planning costs $300 per hour, with no account minimums, no ongoing fees, and no requirement to move your money anywhere. A complete retirement withdrawal strategy for most households takes a handful of hours, so the typical engagement runs in the low four figures, once.

I also work with clients on an ongoing, assets under management basis, where I’m actively managing the portfolio itself alongside the planning, rebalancing, coordinating tax strategy across accounts, adjusting as markets and tax law change, and being available whenever a question comes up rather than only during a scheduled engagement. That model makes the most sense for people who want their investments actively managed as part of the relationship, not just for a specific planning question.

Which one fits depends on what you’re actually looking for. If you have a defined, narrow question, “what order should I withdraw from my accounts” or “how much should I convert to Roth this year”, hourly planning is built exactly for that. You keep your accounts wherever they are, you get a written plan with specific dollar amounts and deadlines, and you come back when something changes: a new tax law, an inheritance, a decision about Social Security. If you’d rather have someone actively managing the full picture on an ongoing basis, the AUM model is the better fit. I offer both, and I’ll tell you plainly which one makes sense for your situation.

How Does Your Retirement Withdrawal Strategy Fit Into the Focus on Retirement Blueprint System?

Tax distribution planning is one of the six planning projects inside the Focus on Retirement Blueprint System, my four-step process for building a complete retirement plan, alongside investment planning, retirement income, Social Security timing, insurance consulting, and estate planning.

I built the Blueprint because these projects don’t live in isolation. Your withdrawal order affects your Social Security taxation. Your Roth conversions affect your Medicare premiums. Your estate plan changes which accounts your kids should inherit. When we run the full Blueprint, your withdrawal strategy gets built with all of those connections in view, and it ends in what I call a one-pageish written plan with 90-day and six-month action items, not a 75-page binder you’ll never open.

So you have two ways to work on this with me. If your withdrawal strategy is the one question keeping you up at night, hire me hourly, and we’ll solve it. If you’re approaching retirement and want the whole picture built at once, the Blueprint covers this project and the other six as a flat-fee engagement. Plenty of clients start hourly and move to the Blueprint once they see how the pieces connect.

When should I build my retirement withdrawal strategy?

Ideally, five to ten years before retirement. That’s when you still have room to shift savings between account types, plan your Roth conversion window, and coordinate your retirement date with your Social Security strategy.

But the honest answer is: whenever you’re asking. I’ve built retirement withdrawal strategies for people at 55 and 75, and in most cases, they left with a lower projected lifetime tax bill than the path they were on.

Joseph Carbone, Jr., CFP® is the founder of Focus Planning Group, a fiduciary financial planning firm based in Bayport, New York, serving clients nationwide. He offers hourly planning at $300 per hour and the Focus on Retirement Blueprint System as a flat-fee engagement, with client accounts held at Charles Schwab.