Retirement Drawdown Sequence Optimization

Retirement drawdown sequencing is the strategy of deciding which accounts — taxable brokerage, traditional IRA, Roth IRA, or 401(k) — to withdraw from first in retirement to minimize lifetime taxes and extend portfolio longevity. The order of withdrawals can dramatically affect how long your money lasts and how much you lose to taxes each year.

Most retirees or near-retirees default to withdrawing from whatever account is most accessible, unknowingly creating avoidable tax burdens or depleting tax-free growth too early — AI can model multiple sequencing scenarios using your specific account balances, expected expenses, and tax bracket to identify the optimal withdrawal order. This concept is especially valuable for anyone within ten years of retirement or already drawing down assets.

How to apply it

Prompt ChatGPT: 'I have $[amount] in a traditional 401(k), $[amount] in a Roth IRA, and $[amount] in a taxable brokerage account. I plan to retire at [age] with $[monthly expense] needs and expect Social Security of $[amount] at [age]. Walk me through a tax-efficient drawdown sequence for the first five years of retirement and explain the reasoning behind each step.'