I’m 67 years old and have worked hard to max out multiple retirement accounts — which ones should I tap into first once I retire?

Updated: 02 Feb, 2025 • 0 • min read

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Saving for a secure retirement takes a significant amount of effort.

In 2022, the average retirement account balance among 67-year-olds was approximately $609,000, according to the Federal Reserve. If your retirement savings are equal to or more than that amount, you've done an excellent job of building your retirement wealth.

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Conserving money is only one part of the basics. Ensuring that money lasts a long time is what holds everything together.

Here’s the correct order for you. It also means knowing which retirement accounts to take money from first. Assuming you have a mix of accounts that includes savings, a brokerage account, a traditional IRA, and a Roth IRA, here's the order you may want to work with.

What type of investments would you like to add to your taxable investment portfolio?

It's logical that you've invested some of your retirement funds in a taxable brokerage account. IRAs, and by extension 401(k) plans, require you to wait until you're 59 1/2 years old to withdraw money without incurring a penalty, and there are also annual limits on how much you can contribute towards your retirement.

staying healthy for as long as possible.

Tap your Traditional IRA.

If you have a classic Individual Retirement Account (IRA), you will eventually need to withdraw from it to meet the mandatory minimum distribution (RMD) requirement. Failing to meet the RMD can lead to a 25% penalty.

Even if you can't tap into a Roth IRA right now, it's a good idea to withdraw money from a traditional IRA, because you'll know exactly how much you'll owe in taxes.

You can't predict what tax rates will be in the future, though. If rates increase after the Tax Cuts and Jobs Act ends in late 2025, taking money out of a traditional IRA early could get even pricier. It makes sense to withdraw the money now, because tax rates are likely to go up over time, not down - they won't decrease.

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I can't do that. If you're considering early distributions from a retirement account, such as a Roth Individual Retirement Account (IRA), consider consulting a tax professional.

Allow your Roth IRA to grow tax-free for as long as possible, as this is a valuable benefit you'll want to make the most of.

If you've done a Roth IRA conversion before retirement, you may need to wait a while before you're eligible to take tax-free withdrawals. Normally, you'll need to keep your money in a Roth IRA for about five years to get this benefit. Another reason to let your balance grow is if you moved money into a Roth IRA recently, within the last year or so.

Only withdraw from your savings account when necessary.

You may have cash stashed in a savings account in addition to a brokerage account, a traditional IRA, and a Roth IRA. However, that cash should be set aside for unexpected expenses or periods when your investments take a loss.

Selling investments when their value falls locks in your losses. To avoid this, you can use your regular savings to cover bills as needed, allowing you to ride out market downturns. Although your savings may grow more slowly in retirement than investments like 401(k)s, IRAs, or brokerage accounts, they should serve as your security net, and be used only when really needed.

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