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The standard from what I've read seems to be this:

Retirees should withdraw funds as follows:

-- From their taxable accounts (investment and others)

-- From tax-deferred accounts (401(k), 403(b), 457, SIMPLE IRA plans, etc.)

-- From tax-exempt retirement accounts (Roth IRA, or Roth-optioned accounts)

The goal is to effectively liquidate accounts which are subject to higher taxes,


As long as the tax rate on capital gains and qualified dividends is 0% for a large number of retirees (0% on the first $35,350 for singles, $70,700 for married), a taxable account is as "tax-advantaged" as a Roth IRA.

An annual withdrawal of $70,700 is 4% of a $1.78 million portfolio. And if you're taking a capital gain, some portion of the proceeds is likely to be a tax-free return of capital, so $70,700 will cover much more than a $1.78 million portfolio.

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