How brackets, Roth conversions, and withdrawal ordering compound into six-figure savings.
Working years are simple: salary comes in, taxes come out, done. Retirement is complicated. You pull from multiple accounts with different tax treatments (traditional, Roth, taxable, HSA). Social Security becomes partially taxable. Capital gains stack on top of ordinary income. IRMAA surcharges on Medicare trigger at income cliffs. The wrong withdrawal order can cost tens of thousands per year in avoidable taxes.
The window between retirement and RMDs (ages 63–72 for most people) is the most valuable tax planning opportunity of your life. You have low income (no salary yet, Social Security maybe delayed) and full control over how much you convert from traditional to Roth. Every dollar converted in the 12% bracket is a dollar that won't generate future RMDs in a potentially higher bracket.
The old rule was simple: spend taxable first, tax-deferred second, Roth last. Modern analysis is more nuanced. Blended withdrawals — pulling a bit from each account each year — often produces better lifetime outcomes because they smooth brackets, capture the 0% capital gains bracket, and avoid tax cliffs. The "right" order depends on your specific situation, but a rigid rule is almost always wrong.