“`html

‘I find that advice questionable’: Is It Time to Rethink the Myth of Tapping Your Roth Last?

We’ve all heard it before: when you retire, spend your taxable accounts first, then dip into your traditional IRAs and 401(k)s, and save your Roth IRA for last so it can keep growing tax-free. It’s a neat, tidy plan that sounds great on paper. But here’s the thing—I’ve seen this advice trip up real people in real life, sometimes with some pretty nasty tax surprises.

Why Do We Follow This “Roth Last” Rule Anyway?

The logic is straightforward: Roth IRAs grow tax-free, so leaving that money alone lets it compound without the taxman taking a cut. Traditional IRAs and 401(k)s? Withdrawals are taxed as ordinary income, so we want to be careful there. And since you’ve already paid taxes on your taxable accounts, it makes sense to spend those first.

Sounds good, right? But here’s the catch: life (and taxes) don’t always follow a script.

Why Real Life Doesn’t Always Fit the Script

Retirement isn’t a straight line. One year you might have high medical bills, the next you sell a property or start collecting Social Security. Then there’s Required Minimum Distributions (RMDs) kicking in at age 73, which can force you to withdraw more than you planned—and pay taxes on it.

I’ve seen folks push off tapping their traditional IRAs for too long, only to get hit with a hefty tax bill when RMDs hit. Meanwhile, their Roth sits there untouched, not really helping with the tax load.

The Roth Isn’t Always a Magic Wand

Don’t get me wrong—Roth IRAs are fantastic. Tax-free growth, no RMDs, and flexible withdrawals are all huge perks. But they’re not a one-size-fits-all solution.

Imagine you retire early and have a few years where your income is low before Social Security and RMDs start. If you stick rigidly to the “tap Roth last” advice, you could miss out on a great chance to withdraw from your traditional IRA at a low tax rate. That can reduce future RMDs and smooth out your tax bills over time.

Bottom line: it’s not just about how much you have, but when and how you take it out.

Playing the Tax Bracket Game

If you have a low-income year or two, it might make sense to do partial Roth conversions or take some withdrawals from your traditional IRA. Yes, you’ll pay tax now—but often at a lower rate than you would later. This approach can lead to paying less in taxes over your entire retirement, even if it means tapping your Roth earlier than what the “experts” say.

I’ve worked with clients who manage their withdrawals carefully, mixing Roth and traditional funds to keep their taxable income just right each year. The payoff? Lower lifetime taxes and more financial breathing room.

Watch Out for Social Security and Medicare Surprises

Here’s a twist most don’t think about: how your withdrawals affect Social Security taxes and Medicare premiums. If you wait too long to take money out of your traditional accounts, you might bump into higher Medicare premiums due to IRMAA (Income-Related Monthly Adjustment Amount). That means you end up paying more for Part B and D premiums—something that flies under the radar but adds up.

Spreading out withdrawals and sometimes dipping into your Roth earlier can help avoid these higher costs. The calculations aren’t simple, but they’re worth paying attention to.

When Does the Old Advice Still Make Sense?

Don’t throw the baby out with the bathwater. If you expect your tax bracket to be higher later in retirement, or want to leave a Roth as an inheritance (which is a fantastic legacy tool), holding off on Roth withdrawals can be smart.

Plus, if you have big taxable accounts generating enough income, you might naturally end up tapping those first. For wealthier families, estate planning often takes priority, and the “Roth last” rule fits better.

Where the “Roth Last” Approach Falls Short

• Early retirement low-income years: If you retire at 60 but don’t start Social Security or RMDs until your late 60s or early 70s, you have a window to take advantage of lower tax brackets. Sticking to the old rules means missing out.
• Big unexpected expenses: Whether it’s medical bills, home repairs, or helping family, sometimes it makes sense to withdraw from your Roth to avoid pushing yourself into a higher tax bracket with a big IRA withdrawal.

And here’s a subtle but important point: markets don’t always cooperate. If your Roth is heavily invested in stocks and the market dips, you might not want to sell other assets just to keep the Roth “untouched” at all costs.

A Real-Life Example: Flexibility Wins

Take a couple retiring at 62 with $500k in traditional IRAs, $200k in Roth, and $300k in taxable investments. They plan to delay Social Security until 70. If they only spend from taxable accounts and wait on IRA withdrawals, RMDs could hit hard later—along with a big tax bill.

Instead, they could use IRA withdrawals or Roth conversions to fill up the 12% or 22% tax bracket each year. They’d cover the rest with taxable accounts and occasional Roth withdrawals. This strategy often leads to lower taxes, manageable Medicare premiums, and a nicely balanced portfolio.

Don’t Forget State Taxes

One thing many forget: your state’s tax rules. Some states don’t tax Social Security or retirement income, while others do. In higher-tax states, it might actually make sense to prioritize Roth withdrawals earlier—especially if you’re thinking about moving down the road.

When the Flexible Approach Isn’t the Answer

• If you have a big pension or other steady income, you might never see a low-tax window to leverage.
• If you plan to leave your Roth to heirs who will face higher tax brackets, letting it grow untouched remains a solid plan.

The Takeaway

The “tap Roth last” mantra is too simple for the complex journey retirement really is. Taxes, market ups and downs, spending surprises, and Medicare premiums all play a role in what makes the most sense.

What works best is reviewing your situation regularly and being flexible. Use your Roth strategically, not like a rule etched in stone. Don’t let catchy phrases lock you into decades of financial decisions that might not fit your life.

Your retirement deserves better than autopilot.

“`