The Withdrawal Order That Outsmarted His Taxes

Ron did everything right. He saved diligently, retired comfortably, and pulled his income from the account that felt easiest.

He had no idea that one simple habit was handing the IRS thousands of dollars more than he owed. Every single year.

A Full Account and a Hidden Leak

Meet Ron. Early 60s, recently retired, with a little over $2.5 million spread between a traditional IRA and a taxable brokerage account. He wasn't worried about having enough. He wanted to make sure he was being smart about keeping it.

What he didn't realize was that how he drew his paycheck was costing him far more than it needed to.

The Easy Move That Quietly Cost Him

Like most people, Ron reached for the simplest option. He'd just pull everything he needed from his IRA. One account, one withdrawal, done.

But not all dollars are taxed the same. Think of your tax brackets like a row of buckets, each one more expensive to fill than the last. Ron was pouring all of his income into the priciest bucket, spilling into a much higher rate year after year without knowing it.

A Smarter Order, Not a Bigger Sacrifice

The fix wasn't spending less. It was changing where the money came from.

Instead of draining one account, we blended his withdrawals. We drew just enough from his IRA to fill the lower-cost buckets, then covered the rest from his brokerage account, where gains are usually taxed more gently. Same paycheck. Far less lost to taxes.

Which dollars you spend first is a tax decision as much as a spending one.

What He Got to Keep

The money that stayed in his pocket was real, and it compounded year after year instead of going to the IRS.

The quieter win came later. Once Ron trusted that his income was built the smart way, he stopped second-guessing it. He booked the trip. He picked up the dinner check. The confidence followed the strategy.

The Part Most People Get Backwards

Having enough saved is only half the equation. Drawing it in the right order, from the right accounts, is what quietly protects it, so more of what you built stays yours.

Thank you for reading!

Last thing – I read every single reply to these emails.

I use these responses to guide my content, so your question might become next week's deep dive.

Happy retiring,

Josh Rendler, CFP® Founder, Motion Retirement Partner, Award-Winning Retirement Firm