Retirement tax planning / By Rich LoPresti · Draft for author review

Why a growing IRA deserves a withdrawal plan.

A large pretax IRA is not the same as an equally large amount of after-tax spending money. The difference can reach beyond the tax return.

You can do a good job saving and still have an important unanswered question: how will you use those savings when you need them?

An investment statement tells you what the account is worth. It does not tell you how a distribution will fit alongside a pension, Social Security, investment income or a change in your household. That is why I look at both what you own and where you own it.

Allocation and location answer different questions.

Asset allocation concerns the investments and risks in the portfolio. Asset location concerns which account types hold them. A diversified portfolio may still be heavily concentrated in pretax accounts. That is not proof of a mistake. It is a reason to examine the future withdrawal plan.

If those accounts grow faster than you draw them down, the amount potentially subject to tax can remain substantial. A conversion program does not automatically eliminate that exposure. You need to look at balances, taxes and spending together over time.

A required withdrawal is not a required purchase.

Once applicable required-distribution rules apply, you may need to withdraw funds even if you do not need to spend them. RMD calculations generally use the prior year-end balance and an IRS divisor. The taxable portion counts as income. IRS RMD guidance.

The account can therefore matter to your tax picture even when other resources already cover your spending. A plan should examine several years and different assumptions, not just this December.

A surprise expense can require more than the price tag.

Here is a deliberately simplified hypothetical: you need $70,000 to spend, entirely from a pretax account, and assume a flat 30% tax on the whole withdrawal. You would need to withdraw $100,000 to keep $70,000. That is arithmetic, not a tax estimate: actual tax brackets, basis, other income and state taxes can change the answer.

This is why accessible resources in different account types can be useful. It does not mean every expense should come from a Roth or that every household needs the same account mix. Liquidity, investment risk and the future use of the money matter too.

The chain reaction can reach another bill.

Higher income can affect Medicare’s income-related premiums. The calculation generally looks back two tax years, and filing status matters. That makes it worth examining the combined effect of withdrawals and other income—not labeling a transaction good or bad on its own. SSA Medicare guidance.

A surviving spouse may later face a different filing status and income picture. Review that scenario separately; household costs and account balances do not necessarily change in the same proportion.

Compare a decision with its alternative.

A Roth conversion generally creates taxable income to the extent the converted amount has not already been taxed. Paying that tax is a real cost. Compare converting with not converting, including how taxes would be funded and what happens if assumptions disappoint. IRS conversion guidance.

The goal is not to convert the largest amount or predict the market. It is to coordinate investment location, cash needs and income decisions around the retirement you want.

Start with one unanswered question.

Have you seen how your pretax balances and withdrawals might develop under different assumptions? If not, that is a useful place to begin.

Reviewed September 12, 2026. Adapted from recurring planning explanations; not a client case study, testimonial or individualized recommendation. Author and firm approval pending.