Which withdrawal order actually saves the most lifetime tax, and does the "lowest tax this year" rule ever backfire?
Not the same order every time, and the single-year "lowest tax this year" rule is not always that order. QuantCalc searches a set of whole-retirement withdrawal orders, plus Roth-conversion candidates, per household and recommends whichever has the lowest present value of lifetime tax; that recommendation can never cost more than drawing traditional first. For a taxable-heavy household that retires at 62 and plans to 80, the recommended order (Traditional up to the standard deduction each year, then taxable, then Roth) lowers lifetime tax by a paired median of $16,836 versus traditional-first. For a traditional-heavy household in California planning to 90, the OLD single-year rule alone would cost a paired median of $52,157 more than traditional-first — the recommended order there is simply drawing traditional first — no other candidate cleared the $1,000 margin against it, so there is no separate order to switch to. Holding a balanced three-way household fixed and stretching only its horizon, the single-year rule's own score against traditional-first ranges from a cost of $4,398 at age 80 to a cost of $9,168 at age 90, while the recommended order's saving never drops below zero. Figures are paired per-path medians in present value over 4,000 market paths for 9 households under 2026 tax rules — see the household table and the horizon panel.
| Key number | Value | Where on this page |
|---|---|---|
| Taxable-heavy, retire at 62, plan to 80: paired median saving from the recommended order (fill_std) | +$16,836 band +$7,675 … +$29,004 | Household table |
| Traditional-heavy, California, plan to 90: paired median cost of the single-year order (recommended order there saves +$0) | −$52,157 recommended order p10 … p90: +$0 … +$0 | Household table |
| Single-year order's own score vs traditional-first, swept across one household's horizon (ages 62–80 vs 62–90) | −$4,398 at 80 → −$9,168 at 90 | Horizon panel |
| Households where the single-year order also helps / backfires / is about even (the recommended order's own saving is never negative) | 4 / 4 / 1 of 9 | Household table |
| Market paths per household (paired, common random numbers) | 4,000 | Methodology |
Sequencing which account you draw from in retirement is one of the most-repeated levers in tax planning. A tool can sharpen the intuition into a rule — each year, split the withdrawal to minimize this year's tax. This study asks two questions: whether that single-year rule lowers taxes over a whole retirement, and which whole-retirement order does. The engine behind these figures simulates a set of candidate orders on identical market paths and reports, for each household, the order with the lowest present value of lifetime tax and what it saves against simply drawing traditional first.
The two-sided result. For a household in its low-income years before Social Security and required distributions, the recommended order (Traditional up to the standard deduction each year, then taxable, then Roth) lowers lifetime tax by a paired median of $16,836 in present value against traditional-first (Taxable-heavy, retire at 62, plan to 80; band +$7,675 to +$29,004). For a high-balance (IRMAA-exposed) household (Traditional-heavy, California, plan to 90), the single-year order raises lifetime taxes by a paired median of $52,157 against traditional-first, and the recommended order there is Traditional first, then Roth, then taxable: drawing traditional first is already the lowest-cost order, so the saving is +$0. Every figure is a paired per-path median in present value, including tax still owed on any traditional balance left at the end.
Run this household in the planner →
Opens the tax-aware planner prefilled with the Taxable-heavy corridor household above (California, retire at 62, $300,000/$150,000/$550,000 traditional/Roth/taxable) — then change the numbers to see which side of the crossover you land on.
The full picture, household by household
Each household funds the same after-tax spending every year under every candidate order and pays that order's taxes from the portfolio, so both lifetime tax and portfolio survival can differ between orders; the table shows survival under the recommended order and under traditional-first. "Recommended lifetime tax" is the median lifetime tax paid under the recommended order; "Traditional-first" is the median under the plain draw-traditional-first rule. "Recommended order" is the candidate with the lowest present value of lifetime tax for that household; "Single-year order vs traditional-first" is what the per-year lowest-tax rule would have cost or saved. The saving column is the apples-to-apples number: the paired median, over market paths, of (traditional-first − recommended) in present value. It is never negative — traditional-first is itself always one of the candidates.
| Household | Ages | Trad / Roth / Taxable | Spend/yr | Recommended order | Recommended conversions | Recommended lifetime tax | Traditional-first | Saving of the recommended order (present value) | p10 … p90 band | Single-year order vs traditional-first | Portfolio survival: recommended / traditional-first |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balanced three-way Pre-RMD corridor · FL | 62–80 | $500,000 / $200,000 / $300,000 | $60,000 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | none | $29,248 | $66,214 | +$14,695 | −$716 … +$23,437 | −$4,398 | 99.9% / 99.8% |
| Taxable-heavy Pre-RMD corridor · CA | 62–80 | $300,000 / $150,000 / $550,000 | $66,000 | Traditional up to the standard deduction each year, then taxable, then Roth | none | $21,123 | $48,728 | +$16,836 | +$7,675 … +$29,004 | +$9,522 | 98.6% / 98.4% |
| Traditional-heavy Pre-RMD corridor · FL | 62–82 | $750,000 / $100,000 / $150,000 | $60,000 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | none | $53,044 | $96,251 | +$3,894 | −$16,745 … +$26,469 | −$14,143 | 99.4% / 99.4% |
| Roth-heavy Pre-RMD corridor · FL | 62–82 | $200,000 / $600,000 / $200,000 | $60,000 | Traditional up to the standard deduction each year, then taxable, then Roth | none | $0 | $17,644 | +$15,281 | +$9,376 … +$17,014 | +$7,822 | 99.8% / 99.8% |
| Balanced three-way RMD straddle · FL | 70–88 | $650,000 / $250,000 / $300,000 | $72,000 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | none | $80,707 | $117,031 | +$8,341 | −$4,214 … +$33,598 | +$11,699 | 100.0% / 100.0% |
| Traditional-heavy RMD straddle · CA | 70–90 | $900,000 / $120,000 / $180,000 | $72,000 | Traditional first, then Roth, then taxable | none | $151,409 | $151,409 | +$0 | +$0 … +$0 | −$14,364 | 100.0% / 100.0% |
| Traditional-heavy Deep RMD tail · FL | 75–95 | $900,000 / $100,000 / $150,000 | $66,000 | Traditional first, then Roth, then taxable | none | $175,568 | $175,568 | +$0 | +$0 … +$0 | +$0 | 100.0% / 100.0% |
| Balanced three-way Deep RMD tail · CA | 75–93 | $700,000 / $250,000 / $250,000 | $72,000 | Traditional first, then Roth, then taxable | none | $110,876 | $110,876 | +$0 | +$0 … +$0 | +$1,186 | 100.0% / 100.0% |
| Traditional-heavy High-balance (IRMAA-exposed) · CA | 70–90 | $1,800,000 / $400,000 / $600,000 | $144,000 | Traditional first, then Roth, then taxable | none | $353,906 | $353,906 | +$0 | +$0 … +$0 | −$52,157 | 99.6% / 99.6% |
Where the single-year rule also helps
The common thread in these cases is a low-income corridor: the household retires before claiming Social Security and before required distributions begin, so its taxable income sits low for a stretch of years. Steering the year's withdrawal to keep income low — and to realize taxable dollars cheaply while brackets are empty — is room that both the recommended order and the single-year rule can use.
Taxable-heavy · retire at 62, plan to 80 · California
The recommended order — Traditional up to the standard deduction each year, then taxable, then Roth — lowers lifetime tax here by a paired median of $16,836 in present value against drawing traditional first (band +$7,675 to +$29,004). The single-year "lowest tax this year" rule also helps here, by a paired median of $9,522 against traditional-first — measured path by path, then taking the median of the per-path difference. This household spends much of its early retirement in a low-income window — before Social Security and before required distributions — and both the recommended order and the single-year rule use that room. Portfolio survival is 98.6% under the recommended order and 98.4% drawing traditional first (mortality-adjusted 99.1% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 62 | Yr 2 age 63 | Yr 3 age 64 | Yr 4 age 65 | Yr 5 age 66 |
|---|---|---|---|---|---|
| From Traditional | $16,101 | $16,099 | $16,087 | $18,155 | $18,120 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $51,037 | $51,093 | $51,156 | $49,001 | $49,078 |
| Tax paid that year | $1,138 | $1,191 | $1,242 | $1,157 | $1,197 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Roth-heavy · retire at 62, plan to 82 · Florida
The recommended order — Traditional up to the standard deduction each year, then taxable, then Roth — lowers lifetime tax here by a paired median of $15,281 in present value against drawing traditional first (band +$9,376 to +$17,014). The single-year "lowest tax this year" rule also helps here, by a paired median of $7,822 against traditional-first — measured path by path, then taking the median of the per-path difference. This household spends much of its early retirement in a low-income window — before Social Security and before required distributions — and both the recommended order and the single-year rule use that room. Portfolio survival is 99.8% under the recommended order and 99.8% drawing traditional first (mortality-adjusted 99.9% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 62 | Yr 2 age 63 | Yr 3 age 64 | Yr 4 age 65 | Yr 5 age 66 |
|---|---|---|---|---|---|
| From Traditional | $16,101 | $16,099 | $16,087 | $18,155 | $18,120 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $43,899 | $43,901 | $43,913 | $41,845 | $41,880 |
| Tax paid that year | $0 | $0 | $0 | $0 | $0 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Balanced three-way · retire at 70, plan to 88 · Florida
The recommended order — Traditional to the top of the 10% bracket each year, then taxable, then Roth — lowers lifetime tax here by a paired median of $8,341 in present value against drawing traditional first (band −$4,214 to +$33,598). The single-year "lowest tax this year" rule also helps here, by a paired median of $11,699 against traditional-first — measured path by path, then taking the median of the per-path difference. Portfolio survival is 100.0% under the recommended order and 100.0% drawing traditional first (mortality-adjusted 100.0% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 70 | Yr 2 age 71 | Yr 3 age 72 | Yr 4 age 73 | Yr 5 age 74 |
|---|---|---|---|---|---|
| From Traditional | $19,075 | $18,239 | $17,414 | $25,304 | $26,357 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $18,165 | $19,000 | $19,826 | $14,048 | $13,252 |
| Tax paid that year | $1,240 | $1,239 | $1,240 | $3,348 | $3,613 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Balanced three-way · retire at 75, plan to 93 · California
Here the recommended order is Traditional first, then Roth, then taxable: drawing traditional first (or a near-tied fixed order) is already close to the lowest-cost order, so the recommendation only saves a paired median of +$0 against it. The single-year "lowest tax this year" rule also helps here, by a paired median of $1,186 against traditional-first — measured path by path, then taking the median of the per-path difference. Portfolio survival is 100.0% under the recommended order and 100.0% drawing traditional first (mortality-adjusted 100.0% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 75 | Yr 2 age 76 | Yr 3 age 77 | Yr 4 age 78 | Yr 5 age 79 |
|---|---|---|---|---|---|
| From Traditional | $35,227 | $35,348 | $35,468 | $36,485 | $36,582 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $0 | $0 | $0 | $0 | $0 |
| Tax paid that year | $4,026 | $4,148 | $4,268 | $5,285 | $5,382 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Run the corridor household yourself →
Where it barely matters
When required distributions already force most of the year's cash out of the traditional account, there is little left to sequence — every candidate order converges.
Traditional-heavy · retire at 75, plan to 95 · Florida
Here the recommended order is Traditional first, then Roth, then taxable: drawing traditional first (or a near-tied fixed order) is already close to the lowest-cost order, so the recommendation only saves a paired median of +$0 against it. The single-year rule comes out within $500 of traditional-first here (+$0). Required distributions already force most of the draw out of the traditional account, so no order — recommended or single-year — has much room left to change the outcome. Portfolio survival is 100.0% under the recommended order and 100.0% drawing traditional first (mortality-adjusted 100.0% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 75 | Yr 2 age 76 | Yr 3 age 77 | Yr 4 age 78 | Yr 5 age 79 |
|---|---|---|---|---|---|
| From Traditional | $36,585 | $37,803 | $38,836 | $39,985 | $41,325 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $0 | $0 | $0 | $0 | $0 |
| Tax paid that year | $4,190 | $4,550 | $4,868 | $5,935 | $6,610 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Where the single-year rule backfires
These households share a large traditional balance and enough headroom that a single-year objective and a whole-life objective pull apart. In every case the recommendation search still finds an order — sometimes traditional-first itself, sometimes a bracket fill or a Roth conversion — whose saving against traditional-first is never negative; the single-year rule has no such guarantee.
Balanced three-way · retire at 62, plan to 80 · Florida
The recommended order — Traditional to the top of the 10% bracket each year, then taxable, then Roth — lowers lifetime tax here by a paired median of $14,695 in present value against drawing traditional first (band −$716 to +$23,437). But the single-year "lowest tax this year" rule raises lifetime taxes here, by a paired median of $4,398 versus simply drawing traditional first. Minimizing this year's tax means drawing whichever bucket is cheapest right now — often the tax-free Roth or return-of-basis taxable dollars — which preserves the traditional balance. Over a long horizon that preserved balance grows and is then forced out as required distributions at higher rates, with IRMAA surcharges on top. The recommended order avoids that trap by scoring the whole retirement, not just this year. Portfolio survival is 99.9% under the recommended order and 99.8% drawing traditional first (mortality-adjusted 99.9% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 62 | Yr 2 age 63 | Yr 3 age 64 | Yr 4 age 65 | Yr 5 age 66 |
|---|---|---|---|---|---|
| From Traditional | $28,500 | $28,488 | $28,483 | $30,551 | $30,508 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $32,740 | $32,751 | $32,757 | $30,694 | $30,731 |
| Tax paid that year | $1,240 | $1,239 | $1,240 | $1,240 | $1,239 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Traditional-heavy · retire at 62, plan to 82 · Florida
The recommended order — Traditional to the top of the 10% bracket each year, then taxable, then Roth — lowers lifetime tax here by a paired median of $3,894 in present value against drawing traditional first (band −$16,745 to +$26,469). But the single-year "lowest tax this year" rule raises lifetime taxes here, by a paired median of $14,143 versus simply drawing traditional first. Minimizing this year's tax means drawing whichever bucket is cheapest right now — often the tax-free Roth or return-of-basis taxable dollars — which preserves the traditional balance. Over a long horizon that preserved balance grows and is then forced out as required distributions at higher rates, with IRMAA surcharges on top. The recommended order avoids that trap by scoring the whole retirement, not just this year. Portfolio survival is 99.4% under the recommended order and 99.4% drawing traditional first (mortality-adjusted 99.6% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 62 | Yr 2 age 63 | Yr 3 age 64 | Yr 4 age 65 | Yr 5 age 66 |
|---|---|---|---|---|---|
| From Traditional | $28,500 | $28,488 | $28,483 | $30,551 | $30,508 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $32,740 | $32,751 | $32,757 | $30,694 | $30,731 |
| Tax paid that year | $1,240 | $1,239 | $1,240 | $1,240 | $1,239 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Traditional-heavy · retire at 70, plan to 90 · California
Here the recommended order is Traditional first, then Roth, then taxable: drawing traditional first (or a near-tied fixed order) is already close to the lowest-cost order, so the recommendation only saves a paired median of +$0 against it. But the single-year "lowest tax this year" rule raises lifetime taxes here, by a paired median of $14,364 versus simply drawing traditional first. Minimizing this year's tax means drawing whichever bucket is cheapest right now — often the tax-free Roth or return-of-basis taxable dollars — which preserves the traditional balance. Over a long horizon that preserved balance grows and is then forced out as required distributions at higher rates, with IRMAA surcharges on top. The recommended order avoids that trap by scoring the whole retirement, not just this year. Portfolio survival is 100.0% under the recommended order and 100.0% drawing traditional first (mortality-adjusted 100.0% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 70 | Yr 2 age 71 | Yr 3 age 72 | Yr 4 age 73 | Yr 5 age 74 |
|---|---|---|---|---|---|
| From Traditional | $38,313 | $38,434 | $38,554 | $39,571 | $39,668 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $0 | $0 | $0 | $0 | $0 |
| Tax paid that year | $4,713 | $4,834 | $4,954 | $5,971 | $6,068 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Traditional-heavy · retire at 70, plan to 90 · California
Here the recommended order is Traditional first, then Roth, then taxable: drawing traditional first (or a near-tied fixed order) is already close to the lowest-cost order, so the recommendation only saves a paired median of +$0 against it. But the single-year "lowest tax this year" rule raises lifetime taxes here, by a paired median of $52,157 versus simply drawing traditional first. Minimizing this year's tax means drawing whichever bucket is cheapest right now — often the tax-free Roth or return-of-basis taxable dollars — which preserves the traditional balance. Over a long horizon that preserved balance grows and is then forced out as required distributions at higher rates, with IRMAA surcharges on top. The recommended order avoids that trap by scoring the whole retirement, not just this year. Portfolio survival is 99.6% under the recommended order and 99.6% drawing traditional first (mortality-adjusted 99.9% under the recommended order); every candidate funds the identical after-tax spending each year and pays its own taxes from the portfolio, so both the tax bill and survival can differ between orders.
| Recommended-order draw (median, real $) | Yr 1 age 70 | Yr 2 age 71 | Yr 3 age 72 | Yr 4 age 73 | Yr 5 age 74 |
|---|---|---|---|---|---|
| From Traditional | $110,579 | $110,810 | $111,067 | $114,204 | $114,223 |
| From Roth | $0 | $0 | $0 | $0 | $0 |
| From Taxable | $0 | $0 | $0 | $0 | $0 |
| Tax paid that year | $14,579 | $14,810 | $15,067 | $18,204 | $18,223 |
| IRMAA surcharge | $0 | $0 | $0 | $0 | $0 |
Why a "tax-smart" order can cost money
The mechanism is not exotic. A rule that minimizes this year's tax draws whichever bucket is cheapest right now. Roth dollars cost nothing this year; taxable dollars sold near their cost basis cost almost nothing. So the single-year order tends to spend Roth and taxable early and leave the traditional balance untouched. That feels efficient — until the required-distribution years arrive.
A large, preserved traditional balance keeps compounding, and once required distributions begin the retiree is forced to pull it out, whether or not the brackets are full. Those forced dollars land on top of Social Security, push more of it into taxable income, and can cross an IRMAA threshold that raises Medicare premiums two years later. The low-bracket corridor years — the cheapest years to have drawn that traditional money — were spent on Roth instead, and that room is gone for good. The recommended order avoids this trap because it scores the whole retirement, not one year at a time; it is why traditional-first (or a bracket fill, or a Roth conversion) so often wins even though it looks unglamorous up front.
The horizon is the hinge
The clearest way to see the trade is to hold one household constant and stretch only its planning horizon. Below is a Balanced three-way pre-RMD corridor retiree, simulated at a spread of end ages, on the identical market paths and seed each time so nothing changes but the years. The recommended order's saving stays ≥ 0 at every horizon (traditional-first is itself always a candidate). The recommended order stays the same throughout this sweep (Traditional to the top of the 10% bracket each year, then taxable, then Roth). The single-year order's own score against traditional-first is a separate story: it never turns positive across these horizons for this household, ranging from a cost of $4,398 at age 80 to a cost of $9,168 at age 90.
| Ages | Years | Recommended order | Recommended lifetime tax | Traditional-first | Saving of the recommended order | p10 … p90 band | Single-year order vs traditional-first |
|---|---|---|---|---|---|---|---|
| 62–78 | 16 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | $23,583 | $67,040 | +$15,292 | −$2,445 … +$24,123 | −$4,851 |
| 62–80 | 18 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | $29,248 | $66,214 | +$14,695 | −$716 … +$23,437 | −$4,398 |
| 62–82 | 20 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | $35,385 | $65,175 | +$13,753 | +$352 … +$23,266 | −$4,825 |
| 62–85 | 23 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | $45,536 | $66,712 | +$12,471 | +$1,400 … +$22,358 | −$6,242 |
| 62–88 | 26 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | $56,452 | $66,632 | +$11,068 | +$1,899 … +$21,595 | −$8,139 |
| 62–90 | 28 | Traditional to the top of the 10% bracket each year, then taxable, then Roth | $64,048 | $66,920 | +$10,155 | +$1,278 … +$21,261 | −$9,168 |
Why this study is different
Most withdrawal-order coverage quotes a single "you could save $X" figure for a single order it picked in advance. Three things make that fragile, and this study addresses all three. First, the number here is a paired per-path median: each candidate order is run on the same simulated markets and the difference against traditional-first is taken path by path, so the figure is one a real retirement could actually experience — not the distance between two separately-ranked medians, which no single path realizes. Second, the traditional-first comparison is an independent simulation with its own account balances, not a one-year hypothetical bolted onto the recommended path — so it is fair to say "a traditional-first retiree would pay this instead." Third, the order itself is chosen by search, not assumed: every household is scored against a full candidate set (fixed orders, bracket fills, Roth-conversion policies, and the old single-year rule), so the "recommended order" is whichever one actually has the lowest present-value lifetime tax for that household, not whichever one the study set out to showcase.
How to read the tables. Every dollar is a paired per-path median in present value. The "p10 … p90 band" (on the recommended order's saving) is the 10th and 90th percentile of the same per-path difference, so it shows the spread of outcomes across market paths, not a confidence interval on an average. A band whose low end stays above zero means the recommended order wins on more than nine paths in ten; a band straddling zero means the median saving is real but small and individual paths can tie or go the other way. The "single-year order vs traditional-first" column is a separate, unpaired-with-the-recommendation figure: the old per-year rule's own paired score against traditional-first, which is not bounded below by zero.
What it means
- "Lowest tax this year" is a corridor tool, not a universal one. Its gains come from a low-income window — retire-early years before Social Security and required distributions. Households with that window and a horizon that does not run deep into the required-distribution tail are where it also happens to pay.
- A single-year objective is not a lifetime objective. Minimizing this year's tax preserves the traditional balance, which is the opposite of what a long horizon with a big tax-deferred account wants. The forced-distribution years are the bill — which is why QuantCalc no longer recommends the single-year rule by default.
- The recommended order is never worse than traditional-first. Because traditional-first is always one of the candidates the search scores, the recommendation's paired saving against it is mathematically bounded at zero from below — a guarantee the single-year rule does not share.
- The right order is household-specific. Account mix, retirement age, spending, state, horizon, and whether there is room to convert to Roth all move which candidate wins. There is no order that is best for everyone; the useful output is a recommendation per household, which is what this study reports.
CC-BY-4.0 — free for any use including republication and journalism, with attribution to QuantCalc Research.
Find your own recommended order
Which order wins — and whether the single-year rule would have helped or backfired — turns on your account mix, your horizon, and your state. QuantCalc's PRO tax-aware simulation searches the same candidate set for your numbers on the same market paths and shows the recommended order with its paired saving and band, year by year, so you see the actual recommendation rather than trusting a rule of thumb.
Open the PRO tax-aware simulation →Methodology
Engine. Each household is run through QuantCalc's tax-aware retirement simulation over 4,000 market paths. A set of whole-retirement policies (traditional first; taxable first; traditional to the standard deduction or to the top of the 10%, 12%, 22% or 24% bracket, or to just under the first Medicare surcharge tier, then taxable, then Roth; the bracket and tier fills completed with a Roth conversion for the room the withdrawals leave, from retirement to the year before required distributions; "convert to the 10% or 12% top, then spend traditional first"; and a single-year lowest-tax grid search) is simulated on identical paths. Each is scored by the present value of lifetime tax — every year's federal, state, IRMAA and penalty cost discounted at the portfolio's own return on that path, plus the tax an heir would owe drawing any remaining traditional balance evenly over ten years as a single filer in the household's state — and the order with the lowest median paired difference against traditional-first is the recommended one. The saving reported is that paired median; the single-year order's own paired median is reported beside it.
Paired baseline. The traditional-first comparison is an independent simulation carrying its own account balances, cost-basis lots, and Medicare-income history, drawn traditional-first each year, and run on the same market and inflation path as every candidate (common random numbers). Because it is a genuine parallel run rather than a one-year counterfactual, its lifetime tax is a defensible "what a traditional-first retiree would actually pay."
Headline statistic. On each path we compute (traditional-first present-value lifetime tax − recommended-order present-value lifetime tax), then report the median of those per-path differences and the 10th and 90th percentiles as a band. This paired median is not the difference between two orders' separately-ranked median lifetime taxes — that difference is a quantity no single path realizes, and the two can even disagree in sign. It is >= 0 by construction, because traditional-first is itself always one of the scored candidates.
Tax detail. The engine applies 2026 statutory federal brackets, the standard and senior deductions, Social Security provisional-income taxation, state income tax by residence, IRMAA tiers on a two-year lookback, and required distributions on the SECURE 2.0 schedule. Taxable-account sales use per-lot HIFO with correct short- and long-term character. The 2026 constants are pinned identically between the engine and the calculator's own tax code by a parity test.
Spending basis. Spending is after tax: each year's withdrawal funds spending plus that year's taxes, paid from the accounts drawn (engine 2026-09-20). Every candidate order funds the identical after-tax spending, so portfolio survival is now a real, per-order measurement rather than an assumption — the table above reports it for the recommended order and for traditional-first.
Verification. The per-candidate withdrawal split and conversion sizing are unit-tested against a shared profile set independently of this study's personas, and the paired-median statistic is asserted against the winning candidate's own recorded score. Every figure on this page is emitted directly by the engine via a data-dump tool; a hand-check in the page generator re-derives the band-brackets-median, sign-consistency, and non-negative-saving invariants from the raw JSONL and stops publication on any mismatch, so the page cannot drift from the data.
Reproducibility. The first persona was simulated twice and returned a bit-identical paired median (difference 0), matching lifetime-tax medians for both orders, and the same recommended policy (match: true). The simulation is seeded and serial, so re-running reproduces every figure.
Model-dependence. These are modeled results under a specific set of 2026 tax rules, a modeled return distribution, and stated household assumptions — not personalized advice. Your brackets, state, health-coverage timing, and longevity all move the verdict. Consult a qualified tax professional before acting.
Changelog
- 2026-10-20 (v2026.4) — dataset regenerated on engine 2.3.0: the score no longer adds spending a market path could not fund on top of the tax. On one path every starting dollar ends as spending, tax or what is left, so a shortfall is the same money as the extra tax that caused it, and counting both overstated the saving on paths that run out of money. Saving figures and their bands moved by up to a few percent on the households and horizons with such paths; no household's recommended order changed.
- 2026-09-20 (v2026.3) — dataset and copy regenerated on the after-tax-spending engine (2026-09-20 plan): each year's withdrawal is grossed up to fund spending plus that year's federal, state, IRMAA and penalty bill, debited from the accounts drawn. Portfolio survival can now differ by withdrawal order (before this change every candidate funded identical gross spending with tax recorded but never debited, so survival was identical by construction); the household table and each household's narrative now report survival under the recommended order and under traditional-first. Every dollar and survival figure on the page moved, and the recommended order itself changed for 2 of the 9 households once the objective scored real, debited after-tax dollars instead of undebited gross ones.
- 2026-09-19 (v2026.2) — dataset and copy regenerated on the corrected whole-retirement policy-search engine (previously a per-year greedy grid search reported as the recommendation). Every household now carries a RECOMMENDED order (never worse than traditional-first, present-value basis incl. deferred heir tax) with the old single-year rule reported beside it as one more candidate. Every figure on the page changed.
- 2026-09-06 — answer-first summary added at the top of the page (the question, a direct answer, a key-numbers table and matching FAQ structured data), all templated from the same data. No figure, the CSV or the JSON changed at that time.
- v2026.1 — initial release (2026-07-22). 9 households plus a 6-point horizon-crossover panel, 4,000 paired market paths, paired per-path median savings with 10th-90th percentile bands, emitted directly by the engine. Tax year 2026.
Dataset license: CC-BY-4.0. QuantCalc is an independent retirement-planning research project. Model-dependent results under 2026 tax rules; not financial, tax, or legal advice.