Drawing Income from Your Roth IRA in Retirement

24 November 2025

Let’s be real—retirement feels a lot more relaxing when you know that you’ve got a steady stream of income flowing in. If you’ve been diligently stashing money into a Roth IRA over the years, you’re ahead of the game. Now that retirement is here (or just around the corner), it’s time to switch gears and start drawing income from that account. But here’s the thing—how you take that money out, and when you do it, can make a huge difference in how long your savings last.

In this guide, we’ll dive into everything you need to know about drawing income from your Roth IRA in retirement. Whether you're a Roth pro or you're just trying to understand how it all works, I’ve got your back.

Why A Roth IRA Is A Retirement Game-Changer

Before we get into the how, let’s quickly talk about the why. Why is drawing income from a Roth IRA such a smart move in retirement?

Here’s the biggie: with a Roth IRA, qualified withdrawals are completely tax-free. That means the money you put in (after-tax dollars) along with the gains it’s made over the years can come out without the IRS taking a cut—if you follow the rules.

Think about it: You paid taxes on that cash when you earned it, you let it grow tax-free, and now you can use it tax-free. It’s kind of like planting a tree and harvesting free fruit every season. Not a bad deal, right?

When Can You Start Taking Withdrawals?

Let’s break it down carefully, because this is where a lot of people get tripped up.

To make qualified withdrawals from your Roth IRA (a.k.a. the ones that are tax-free and penalty-free), two things have to be true:

1. Your account has been open for at least 5 years.
2. You’re age 59½ or older.

If both apply to you, congrats—you’ve got full access to your Roth IRA income without jumping through extra hoops.

If not, don't panic. You can still withdraw your contributions at any time, tax and penalty-free, because you already paid taxes on that money when you put it in. It’s the earnings that can get hit with taxes and penalties if you pull them out too early.

How To Strategically Draw Income From Your Roth IRA

Alright, now for the meat and potatoes. When it comes time to pull income from your Roth IRA, a well-thought-out strategy can stretch your dollars and even reduce taxes across your other accounts.

Here are some smart tactics to consider:

1. Use It Last To Maximize Tax-Free Growth

One of the biggest perks of a Roth IRA is that it doesn’t require minimum distributions (RMDs). That’s right—unlike traditional IRAs or 401(k)s, the IRS doesn’t force you to start tapping into your Roth when you hit a certain age.

So what does this mean for you?

You can let your Roth IRA sit there and continue to grow—tax-free—for as long as you want. Many retirees save their Roth IRA withdrawals for last, letting their other accounts (which may be taxable) cover their initial retirement years.

It’s kind of like having dessert after your veggies—you’re saving the sweetest part of your retirement income for when you really need it.

2. Mix And Match With Other Income Sources

Most folks don’t rely on just one source of income in retirement. You might have Social Security, a pension, a traditional IRA, or a brokerage account. It’s smart to think of your retirement income like a recipe—it needs the right ingredients in the right proportions.

Here’s where Roth IRAs shine: since withdrawals don’t count as taxable income, they can help you stay in a lower tax bracket or avoid taxes on Social Security benefits and Medicare surcharges.

Say you’re trying to live on $60,000 a year. You could take $30,000 from your traditional IRA and $30,000 from your Roth IRA. This way, you reduce how much taxable income you’re reporting—and keep more of your money in your own pocket.

3. Fill Tax Brackets With Traditional IRA First

This one’s a little technical, but I’ll keep it simple.

Let’s say you’re in the 12% federal tax bracket. You might want to draw just enough from your traditional IRA to “fill up” that bracket—no more. After that, any additional income can come from your Roth IRA, which won’t push you into the next tax bracket because it’s not taxable.

It’s kind of like pouring water into a glass—you fill it to the brim with taxable income, but once it’s full, you switch to a different pitcher (your Roth IRA) so it doesn’t spill over into a higher tax rate.

The 4% Rule And Roth IRA Withdrawals

You’ve probably heard of the 4% rule. It’s a simple rule of thumb suggesting you withdraw 4% of your retirement savings per year to make your money last 30 years.

Now, this rule isn’t perfect. It’s more like a rough guideline than a strict formula. But if you're considering using your Roth IRA for income, it helps to have a framework in mind.

Let’s say your Roth IRA has a balance of $500,000 when you retire. Using the 4% rule, you’d aim to withdraw about $20,000 a year. Because Roth withdrawals are tax-free, you don’t need to gross that up to cover taxes. That’s $20,000 straight into your pocket.

Handling Market Volatility

Market dips are a part of the game, but they can be scary—especially when you’re relying on your investments to pay the bills.

One way to smooth out the ride with your Roth IRA is to keep a cash or short-term bond buffer within the account. This lets you ride out storms and avoid selling long-term investments at a loss when the market takes a hit.

Think of it like an emergency fund built right into your Roth IRA. If the market’s acting up, you’ve got a cushion to draw from without touching your more volatile assets.

Roth IRA Conversions in Early Retirement

Here’s a curveball strategy that could really pay off: doing Roth IRA conversions in your early retirement years—before you start taking Social Security.

Here's how it works:

Let’s say you’ve retired at 60, but you’re planning to wait until 70 to start Social Security. You’ve got a decade-long window where your income is low, so your tax bracket might be lower too. That’s the perfect time to convert some of your traditional IRA into a Roth IRA.

Yes, you’ll pay taxes on the conversion—but possibly at a lower rate. And once that money is in your Roth, it’ll grow tax-free and be available for tax-free withdrawals down the road.

This strategy takes some careful planning, but it’s like moving your money into a tax shelter when the weather's calm—so you’re protected when the storm hits later.

Helping Your Heirs: A Roth Can Be A Legacy Tool

Even if you don’t end up spending all your Roth IRA assets, it can still serve a powerful purpose—passing on wealth to your loved ones.

Because Roth IRAs don’t have RMDs, they’re perfect for estate planning. Your heirs will still have to take distributions from the inherited Roth IRA, but those withdrawals will be tax-free. That’s a beautiful gift to leave behind.

It’s like handing your kids a golden goose that lays tax-free eggs. Who wouldn’t want that?

Common Mistakes To Avoid

Alright, let’s talk about a few pitfalls you’ll want to dodge:

- Pulling earnings too early: Remember the 5-year rule? Don’t touch the earnings unless you meet the qualifications.
- Forgetting to review your strategy yearly: Your income needs and tax situation can change. Reassess your withdrawal plan once a year.
- Neglecting a withdrawal plan altogether: Don’t wing it. Have a clear plan so you don't accidentally burn through your nest egg.

A Real-Life Example

Let’s say Susan is 65 and retired with $800,000 in retirement savings—$400,000 in a traditional IRA, $300,000 in a Roth IRA, and $100,000 in a taxable brokerage.

She wants to live on $60,000 a year. Her Social Security provides $20,000 annually.

Here’s how she might structure her withdrawals:

- Take $25,000 from her traditional IRA (just enough to stay in a low tax bracket).
- Take $15,000 from her Roth IRA (tax-free).

Together with her Social Security, that’s $60,000 in total income—and a very efficient approach tax-wise.

Final Thoughts: Roth IRA Income Is About Flexibility

Retirement isn’t just about having money—it’s about having choices. That’s what a Roth IRA gives you. Whether you need income today or want to save it for later, the flexibility and tax advantages are hard to beat.

Drawing income from your Roth IRA in retirement isn’t just about making withdrawals—it’s about making smart ones. With the right plan, you’ll not only protect your savings—you’ll stretch them further and live retirement on your terms.

So pour yourself a cup of coffee (or a piña colada), relax, and know that your Roth IRA is working hard for you—even now.