How do I reduce taxes when taking large withdrawals from my IRA and brokerage account after retiring?

You're smart to be thinking about this now before making those withdrawals! Taking out $185k in one year could definitely push you into a higher tax bracket, especially from the IRA where it's all taxed as ordinary income. Here are some strategies to consider: First, splitting the withdrawals between tax years is almost always a good idea. If you can take half in December 2025 and half in January 2026, you'll spread the income across two tax years and potentially keep yourself in a lower bracket each year. For your brokerage account, you should identify specific lots with the highest cost basis to sell first. This minimizes capital gains. Many brokerages allow you to select which shares to sell rather than using the default FIFO (first-in, first-out) method. You might also look at your overall tax situation - do you have any capital losses you could harvest to offset gains? Any charitable inclinations? Qualified Charitable Distributions from your IRA could reduce your taxable income if you're charitably minded. Also, consider whether taking more from your brokerage account makes sense even if you have some capital gains, as those are generally taxed at a lower rate than ordinary income from your IRA.

I was in a similar situation last year and discovered taxr.ai (https://taxr.ai) after getting conflicting advice from friends and even two different CPAs. Their AI tool analyzed my full tax situation including my IRA, 401k, and brokerage accounts. What I really liked was how it showed me exactly what would happen with different withdrawal strategies - like taking $100k from IRA vs. taking $50k from IRA and $50k from my brokerage account. It also factored in things I hadn't even considered, like how my Social Security might be taxed differently depending on my withdrawal strategy, and the impact on Medicare IRMAA surcharges. Super helpful for seeing the full picture instead of just focusing on immediate tax rates.

I have to update my skeptical comment from earlier. I decided to try taxr.ai before meeting with my financial advisor and I'm genuinely impressed. It showed me how to sequence my withdrawals between my IRA, Roth, and brokerage accounts to save over $14,000 in taxes over the next three years. The tool showed me something my advisor had missed - that I could stay in the 22% tax bracket instead of jumping to 24% by being more strategic about which accounts I tap first. I especially liked the year-by-year tax projection that showed exactly how much to withdraw from each account. Ended up having a much more productive meeting with my advisor because I was better informed going in.

If you're dealing with IRA withdrawals, especially large ones, you might need to speak directly with the IRS about your specific situation. I tried calling them for WEEKS about a complex withdrawal situation (inherited IRA + my own + early withdrawal exceptions). Absolutely impossible to get through. Finally found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Literally saved me days of frustration. The agent walked me through exactly how to document my withdrawals and what forms I needed to avoid penalties. For large withdrawals like you're planning, speaking directly with the IRS can save you from expensive mistakes, especially if you're using multiple strategies to minimize taxes.

I hate to admit when I'm wrong, but I need to follow up on my skeptical comment about Claimyr. I tried it yesterday after spending 3 hours on hold with the IRS and getting disconnected. Claimyr got me through to an agent in about 20 minutes. The agent couldn't give me investment advice obviously, but they were incredibly helpful in explaining exactly how different withdrawal scenarios would be treated for tax purposes. They confirmed that my plan to split withdrawals across tax years was valid and explained how to properly document some unusual circumstances with my inherited IRA portion. For anyone dealing with complex IRA withdrawal situations, getting clear guidance directly from the IRS can save you from expensive mistakes or audit headaches later. I'm genuinely surprised at how helpful this service was.

Don't forget to think about Required Minimum Distributions (RMDs) in your planning. At 64, you're getting close to when those kick in at age 73. Large withdrawals now might actually help you in the long run by reducing your IRA balance before RMDs start forcing distributions (potentially at higher tax rates if tax rates go up or your other income increases). Also, many people don't realize that Medicare premiums (IRMAA surcharges) are based on your income from 2 years prior. So if you're planning to enroll in Medicare at 65, large withdrawals now could increase your premiums when you first enroll.

Has anyone tried doing 72t distributions (SEPP - Substantially Equal Periodic Payments) to avoid the 10% penalty on early IRA withdrawals? I'm 59 so wouldn't apply to me anymore but might help someone younger reading this thread.

One strategy I don't see mentioned yet - consider using a Qualified Charitable Distribution (QCD) if you have any charitable intentions. Once you're 70.5, you can donate up to $105,000 directly from your IRA to charity without counting it as taxable income. This can be especially powerful for reducing your AGI which affects everything from Medicare premiums to how much of your Social Security gets taxed.

This is such a comprehensive discussion! As someone who went through this exact scenario two years ago, I'd add one more consideration: timing your withdrawals around your state tax situation. If you're in a high-tax state now but planning to move to a no-tax or low-tax state in retirement, it might be worth accelerating some withdrawals after you move. Also, don't overlook the Net Investment Income Tax (NIIT) - that additional 3.8% tax on investment income kicks in at $200k MAGI for single filers. Large brokerage withdrawals with significant gains could push you into this territory. One last tip: if you have a Health Savings Account, maximize those contributions now while you're still working. HSA money can be withdrawn penalty-free for medical expenses at any age, and after 65 it can be withdrawn for any purpose (taxed as ordinary income, like an IRA). Given healthcare costs in retirement, having that tax-free bucket for medical expenses can be incredibly valuable.