Building a Tax-Efficient Retirement Income Strategy Across Multiple Account Types
- Erik James Roberts, Founder & Chief Investment Officer | Infinitus Wealth Management
- 13 hours ago
- 7 min read
Most investors spend three decades optimizing how money goes into their accounts and almost no time on how it comes out. Yet a tax-efficient retirement income strategy is built almost entirely on the withdrawal side of the ledger — the order you tap your accounts, the brackets you fill, and the assets you place in each type of account. Done deliberately, coordinating taxable, tax-deferred, and tax-free accounts can meaningfully extend how long a portfolio lasts. Done by default, the IRS quietly sets your withdrawal schedule for you.
I've watched this play out from several seats — as a financial advisor for many years at large wirehouse firms, and now building individual-security portfolios for high-net-worth families at Infinitus. The pattern is consistent: the accumulation math is broadly understood, but the decumulation math is where real after-tax dollars are won or lost. This guide walks through how the pieces fit together, and where the rules stand in 2026.
01 / The Foundation
The Three Tax Buckets: Tax-efficient retirement income strategy
Every account you own falls into one of three tax treatments. A durable tax-efficient retirement income strategy starts with understanding that you are not managing one pool of money — you are managing three, each taxed on a different schedule.
Taxable accounts — brokerage and individual holdings. You're taxed on dividends, interest, and realized gains as they occur, but long-term capital gains and qualified dividends receive preferential rates, and you control the timing of most sales.
Tax-deferred accounts — traditional 401(k), 403(b), and IRA. Contributions reduce taxable income today; every dollar withdrawn later is taxed as ordinary income, and required minimum distributions eventually force the issue.
Tax-free accounts — Roth IRA and Roth 401(k). Funded with after-tax dollars; qualified withdrawals come out entirely tax-free, with no lifetime RMDs on Roth IRAs.
02 / Asset Location
Put the Right Investment in the Right Account
Asset allocation decides what you own. Asset location decides where you hold it — and it's one of the few levers that adds after-tax return without changing your risk profile. The principle is simple: shelter the most heavily taxed assets inside tax-advantaged accounts, and keep the most tax-efficient assets in taxable brokerage accounts.
This is where holding individual stocks and bonds rather than pooled funds becomes a structural advantage. A mutual fund can distribute taxable capital gains to you in a year you never sold a share — gains generated by other investors' redemptions. When you own the underlying securities directly, you control realization: you decide which lots to sell, when to harvest a loss, and which low-basis positions to hold for a step-up. In a taxable account, that control is worth real money every single year.
03 / The Withdrawal Sequence
Manage the Bracket, Not Just the Balance
The conventional rule of thumb — spend taxable first, then tax-deferred, then Roth — is a reasonable default, but it leaves real value on the table. A more deliberate tax-efficient retirement income strategy treats your tax bracket as the thing being managed. In any given year, the question isn't simply which account to draw from; it's how much ordinary income to recognize before you spill into the next bracket.
The years between retirement and your first RMD are the most valuable — and most wasted — tax-planning window of your life.
For many retirees there's a low-income window in their 60s: paychecks have stopped, Social Security may be deferred, and RMDs haven't started. Taxable income can fall into the 10%, 12%, or 22% brackets. Filling those lower brackets intentionally — with strategic traditional-account withdrawals or Roth conversions — can be far cheaper than letting balances compound untouched until RMDs force large distributions into much higher brackets later. That's the “tax torpedo” worth defusing early.
04 / The Forced Withdrawals
RMDs and the 2026 Rules
Required minimum distributions are the clock running against every tax-deferred dollar. Once you reach RMD age, the IRS requires you to withdraw — and pay ordinary income tax on — a set percentage each year, whether you need the cash or not. Large untouched traditional balances can produce RMDs big enough to inflate your bracket, raise Medicare premiums, and pull more of your Social Security into taxable territory.
This is precisely why the planning zone in Figure 3 matters. Every dollar you thoughtfully move out of a traditional account — or convert to Roth — in your low-income 60s is a dollar that won't be forced out at a higher rate in your 70s.
05 / The Conversion Lever
Roth Conversions in the Gap Years
A Roth conversion moves money from a traditional account to a Roth, paying ordinary income tax on the converted amount now in exchange for tax-free growth and withdrawals later. Used well, it's one of the most powerful tools in a tax-efficient retirement income strategy — but it's also one of the easiest to overdo.
The art is in the sizing. Converting just enough to “fill” the top of a target bracket — without spilling into the next one or triggering the 3.8% net investment income tax that begins at $250,000 of income for joint filers — can shift a meaningful balance to the tax-free bucket at a known, controlled cost. Conversions also reduce future RMDs, since Roth IRAs aren't subject to them. The trade-off is real: you pay tax sooner, and the strategy depends on assumptions about future rates and your own income path. It deserves a year-by-year projection, not a one-time decision.
06 / The Infinitus Edge
Where Individual Securities and Hedging Change the Math
Everything above assumes you can control when and what you sell. That assumption only holds if you own individual securities rather than commingled funds — and it's the core of how we build portfolios at Infinitus.
Tax-loss and gain harvesting. Owning individual positions lets us realize losses to offset gains, and recognize gains deliberately in low-bracket years, lot by lot — precision a single fund ticker can't offer.
Individual municipal bonds. A laddered portfolio of individual munis can deliver federally tax-exempt income with a defined maturity schedule, rather than a bond fund's perpetual, less predictable distributions.
Hedging concentrated positions without a taxable sale. Many of the executives, founders, and entertainers we serve in Nashville hold large, low-basis stock positions. A protective put can defend against downside while deferring the capital gain a sale would trigger; a collar can do so at reduced cost. Used within the rules — mindful of constructive-sale and qualified-covered-call treatment — options become a tax-aware risk tool, not a speculation.
By contrast, chasing illiquid alternatives late in life often works against income planning: lockups and unpredictable distributions can collide with the liquidity and bracket control a retiree actually needs. We're deliberately skeptical of complexity that doesn't earn its keep.
07 / Worth Knowing for 2026
Rule Changes That Affect the Plan
A few current figures shape contribution and conversion decisions this year:
Higher contribution limits. The 2026 employee deferral limit for 401(k), 403(b), 457, and the federal TSP is $24,500, with an $8,000 catch-up at 50+. Workers ages 60–63 get an enhanced “super catch-up” of $11,250. The IRA limit is $7,500, plus a $1,100 catch-up.
Mandatory Roth catch-up for high earners. Beginning January 1, 2026, if your prior-year wages from your plan sponsor exceeded $150,000, your catch-up contributions must go into a Roth (after-tax) account. For high earners, this quietly accelerates tax-free balance building.
Roth IRA income phase-outs. Direct Roth IRA contributions phase out between $153,000–$168,000 for single filers and $242,000–$252,000 for joint filers in 2026.
A new senior deduction. For tax years 2025–2028, filers 65 and older may claim an additional $6,000 deduction, subject to income phase-outs — a small but real factor when sizing conversions.
08 / Bringing It Together
A Coordinated, Not Improvised, Plan
A genuinely tax-efficient retirement income strategy isn't a single trick — it's the coordination of all of these levers across a multi-decade horizon: holding balances in all three tax buckets, locating assets where they're taxed least, sequencing withdrawals to manage your bracket, defusing the RMD torpedo early, and converting to Roth while it's cheap. For Nashville's executives, business owners, physicians, and entertainers — many with concentrated stock, variable income, or royalty streams — the coordination is what separates a portfolio that merely performs from one that compounds efficiently after tax.
Talk to Infinitus About Building Your Custom Portfolio
At Infinitus Wealth Management, we build every client a custom portfolio from individual stocks and individual bonds—never mutual funds, rarely an ETF—actively managed and hedged with options where it strengthens the portfolio. We are an independent, fee-only fiduciary: no commissions, no proprietary products, no conflicts pulling against you. Our twelve proprietary strategies give us the range to tailor a portfolio to your tax situation, income needs, and goals, whether you are early in building serious wealth or managing well into eight figures.
If you would like a clear-eyed look at how your current portfolio is actually structured—what it is costing you in fees and tax drag, whether it is being managed at the level of individual holdings, and whether your advisor’s incentives are genuinely aligned with yours—we welcome the conversation. Our complimentary portfolio analysis gives you an objective, holding-level assessment and a direct view of what a custom Infinitus portfolio would look like for you.
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Important Disclosures
Infinitus Wealth Management is a registered investment advisory firm. This article is provided for educational and informational purposes only and does not constitute investment, tax, legal, or accounting advice. It is not an offer or solicitation to buy or sell any security or to enter into any advisory relationship. Any references to specific strategies, withdrawal rates, tax provisions, or historical figures are general in nature and may not be appropriate for any individual investor.
Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal. Tax laws are complex, change frequently, and have unique application to individual circumstances; please consult a qualified tax professional regarding your specific situation. Social Security rules, Medicare rules, and retirement account regulations are subject to legislative and regulatory change.
The information in this article was believed to be accurate at the time of writing but is not guaranteed. Readers should consult with their own qualified advisors before making any financial decisions specific to their situation.
