|Tax Sequencing
Tax-Efficient Withdrawal Sequencing
Optimize which accounts to draw from first to minimize lifetime taxes
Your Situation
Account Balances
Total: $1,200,000
Capital gains tax on gains only
Ordinary income tax on full amount
Ordinary income tax on full amount
Tax-free (qualified)
Tax-free for medical expenses
Lifetime Tax Savings
$-147,594
vs conventional withdrawal
Conventional Tax
$241,285
Avg 10.1% effective rate
Optimized Tax
$388,879
Avg 16.2% effective rate
Conventional Strategy
Traditional order: Tax-deferred → Taxable → Roth
Lifetime Taxes$241,285
Final Portfolio$531,315
Avg Effective Rate8.2%
Draws from tax-deferred accounts first, potentially pushing you into higher tax brackets early.
Tax-Optimized Strategy
Fill low brackets strategically, preserve Roth
Lifetime Taxes$388,879
Final Portfolio$69,878
Avg Effective Rate10.3%
Uses 0% capital gains bracket, fills 12% bracket with IRA, preserves Roth for last.
Key Tax-Saving Strategies
Harvest 0% Capital Gains
Sell taxable investments when income is below $94,050 to pay 0% on gains
Fill the 12% Bracket
Withdraw from Traditional IRA up to $94,300 before higher brackets kick in
Preserve Roth Last
Let Roth grow tax-free as long as possible - it's your most valuable asset
Plan for RMDs
Starting at 73, you must withdraw from Traditional accounts - plan ahead to avoid tax spikes