Required minimum distributions first. Taxable accounts next, followed by traditional IRAs and 401(k)s. Roth IRAs and 401(k)s last. That’s the standard sequence for tax-efficient portfolio draw down during retirement. The overarching thesis is to be sure to tap those accounts where you’ll face a tax penalty for not doing so (RMDs) while hanging on to the benefits of tax-sheltered vehicles for as long as possible. Because Roth assets enjoy the biggest tax benefits–tax-free compounding and withdrawals–and are also the most advantageous for heirs to receive upon your death, they generally go last in the withdrawal-sequencing queue.
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