I've seen posts claiming that if you have a mix of pre-tax and after-tax savings in a 401k, the pre-tax money can be withdrawn up to the threshold of the top of the current 12% tax bracket and after-tax money can be withdrawn in the same year for any additional needed income. This strategy would limit your marginal tax rate to 12% in retirement. Are there any IRS rules that would prevent this?

Some people say that the money has to be withdrawn from the same plan proportionally. If you have $100,000 in pre-tax money and $100,000 in after-tax money all withdraws would have to be 50% pre-tax and 50% after-tax dollars. If that is true, could the money be transferred to separate IRA and Roth IRA accounts to get around that?

Edit: It has been pointed out that I was misunderstanding the meaning of after-tax money. I am interested in any rules governing withdrawals from Traditional and Roth 401k accounts and was unaware of the third category of after-tax money in a Traditional 401k.

  • 2
    Don't confuse "after-tax money in Traditional IRA" (which actually means non-zero cost basis) with Roth accounts.
    – Ben Voigt
    Jan 19, 2019 at 23:34
  • @BenVoigt, thanks for bringing that to my attention. I had no idea that after-tax money could be contributed to a Traditional 401k or IRA.
    – Adam
    Jan 20, 2019 at 5:28
  • If you have one or more trad IRA(s) and basis (post-tax contributions) in any, the basis is aggregated over all accounts and when you withdraw the basis is used pro-rata regardless of which account(s) you withdraw from -- this might be what you heard from 'some people'. However putting basis in a trad, unless followed immediately by a 'backdoor' Roth conversion, is usually a bad strategy and IME rarely done. Apr 14, 2019 at 17:02

1 Answer 1


You are not bound in any way how much money you withdraw from which retirement account. Any combination is possible, and you can (and should) optimize the split for taxes.

There are some special plans for early retirees under 59.5 and other situations where you can make 'substantial regular withdrawal' from specific accounts; those require predefined amounts, but only from those accounts. You can still withdraw from other accounts whatever you feel like.

  • 6
    Traditional IRAs are subject to a required minimum distribution once you are 70.5
    – Eric
    Jan 19, 2019 at 23:50

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