Drawdown Strategy
The plan for which accounts to withdraw from, and in what order, to fund retirement tax-efficiently.
A drawdown (or withdrawal) strategy is the order and mix in which you tap your accounts in retirement — taxable, tax-deferred (traditional), and tax-free (Roth). The sequence has a large effect on your lifetime tax bill, how long the portfolio lasts, and your exposure to ACA subsidies and IRMAA.
A common framework spends taxable accounts first (letting tax-advantaged accounts keep growing), then traditional, then Roth last — but the tax-optimal answer is rarely that simple. Filling low brackets with traditional withdrawals or conversions in early retirement, while harvesting gains at the 0% rate, often beats a rigid order. Comparing strategies side by side against your own numbers is the only way to see the difference.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.