Direct answer: In your 60s, you have three buckets: taxable brokerage, tax-deferred (traditional IRA/401(k)), and tax-free (Roth). The decade before required minimum distributions is the optimal window for Roth conversions, and the sequence in which you draw down these accounts determines your lifetime tax bill.
Account Map for Ages 60-69: Which Accounts to Use
How to use your taxable brokerage account in your 60s
Taxable accounts hold assets taxed at capital-gains rates rather than ordinary income rates. In early retirement, before Social Security and before required minimum distributions, drawing from taxable accounts first can keep taxable income low, making Roth conversions cheaper. Long-term capital gains are taxed at 0% for joint filers with taxable income below roughly $94,000 in 2025. Prioritize selling positions with the smallest embedded gains while harvesting losses against other positions.
How to use your traditional IRA and 401(k) in your 60s
Traditional IRA and 401(k) balances grow tax-deferred but every dollar withdrawn is ordinary income. Required minimum distributions begin at 73 (born 1951-1959) or 75 (born 1960 or later), forcing withdrawals even if you do not need the money. The decade before RMDs is your window to reduce balances through Roth conversions at rates below what your future RMD income might trigger. Conversions in lower-income years before Social Security begins can be especially cost-effective.
How to use your Roth IRA and Roth 401(k) in your 60s
Roth accounts provide tax-free qualified distributions and have no required minimum distribution for the original account owner. Hold Roths last and let them compound. Contributions can be withdrawn at any time tax-free; earnings are tax-free after age 59.5 and a five-year holding period. If you are converting traditional balances to Roth in your 60s, each conversion starts its own five-year clock for that converted amount, though the age 59.5 rule already eliminates penalties.
Frequently Asked Questions
What order should I withdraw from accounts in retirement?
A common sequence is: (1) required minimum distributions first when they begin, (2) taxable accounts next to harvest gains at low rates, (3) traditional IRA or 401(k) for income needs, with Roth accounts last to allow maximum tax-free compounding. The optimal sequence depends on your marginal tax rate each year, Medicare premium thresholds (IRMAA), and estate goals.
When do required minimum distributions start?
RMDs begin at age 73 for those born between 1951 and 1959, and at age 75 for those born in 1960 or later (per the SECURE 2.0 Act). Roth IRAs have no RMD for the original owner. Inherited IRAs have their own rules. Missing an RMD triggers a penalty of 25% of the amount not withdrawn, reduced to 10% if corrected promptly under SECURE 2.0.
Should I do Roth conversions in my 60s?
Yes, if your income in a given year falls below your projected RMD income in your 70s. The gap between retirement and the start of Social Security, Medicare IRMAA thresholds, or RMD-driven income spikes creates windows where your marginal rate is lower than it will be later. Convert up to the top of your current bracket each year, or up to a Medicare IRMAA threshold if premium costs are a concern.