Diversify how you are taxed, not just what you own.
Most retirement savings end up in one tax bucket by default. See your mix, and what blending withdrawals across buckets could save in a single year.
Same withdrawal, two ways
Federal tax on the year's income at 2026 rates.
| From tax-deferred | From tax-free | Federal tax |
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Why the mix matters. In retirement you choose which account each dollar comes from. With money in all three buckets you can fill the low brackets with tax-deferred income and take the rest tax-free. With everything in one bucket, there is nothing to choose.
Most people diversify what they own, not how it is taxed.
Shifting the mix takes years, through Roth contributions and conversions, the accounts you fund next, and how you hold assets you already have. It is one of the few retirement levers that is entirely in your control.
Assumptions and limits. Uses 2026 federal ordinary income tax brackets, standard deduction, the additional deduction for age 65, and the temporary $6,000 senior deduction (2025 through 2028), per IRS Revenue Procedure 2025-32 and the One Big Beautiful Bill Act. All tax-deferred withdrawals are treated as ordinary income; tax-free withdrawals are assumed to meet every requirement for tax-free treatment, including Roth holding periods and, for life insurance, a policy that is not a modified endowment contract and remains in force. Withdrawals from taxable accounts are not modeled, because their tax depends on gains and basis. Ignores the effect of income on Social Security taxation and Medicare premiums, state tax, required minimum distributions, and penalties for early withdrawal. Policy loans reduce cash value and death benefit and may cause a lapse with tax consequences. This tool is general education, not tax or investment advice, and not a recommendation of any product.