The Ultimate Guide to Early Retirement Drawdown (2026)

What It Covers

Scott Trench and Mindy Jensen present three retirement drawdown strategies for early retirees with $2.5M portfolios, comparing sequential withdrawal, blended approach, and RMD suppression to minimize lifetime taxes and maximize estate value.

Key Questions Answered

• •Sequential Drawdown: Withdraw after-tax accounts first, then pre-tax 401k using 72(t) or Roth conversions, then Roth IRA, finally HSA reimbursements. Enables zero percent income tax for early retirement years but risks tax bomb at age 73 with large RMDs.
• •Blended Approach: Withdraw up to standard deduction ($15,750 single) from pre-tax accounts, then harvest capital gains up to zero percent bracket ($48,350 single). Example shows $2,000 tax savings over two years versus sequential method while depleting tax-deferred accounts faster.
• •RMD Suppression: Aggressively withdraw from 401k up to 10-12 percent tax brackets early in retirement, converting excess to Roth or after-tax accounts. Prevents future forced distributions at potentially higher tax rates and creates more tax-favorable inheritance for heirs.
• •Portfolio Location Strategy: Place aggressive stock positions in Roth and HSA accounts for tax-free growth, conservative bonds in tax-deferred 401k accounts, and balanced positions in after-tax brokerage. Test with $10,000 practice portfolio withdrawing $40 monthly before full retirement.