Rather than just a strict ordering of drawdown based on tax deferred, tax free or taxable, how about the ability to set a mixed drawdown approach based on a percentage of the total annual drawdown from, say, tax deferred accounts and taxable accounts?
The goal of doing this would be to "let the air out" of the tax deferred accounts a little at a time leading up to the RMD stage, soas to reduce RMDs.
This could be based on filling up a tax bracket with tax deferred withdrawals, and then taking the rest from taxable. Another approach would be to devise a glideslope of tax deferred withdrawals that resulted in RMDs that were equal to or less than annual expenses when RMDs kick in. And a third approach would be to simply set a fixed percentage of annual withdrawals from the tax deferred and taxable accounts.
Whichever way it's done, a hybrid approach could end up being the most tax effective way to decumulate for retirees who have significant amounts invested in both tax deferred and taxable.
Maybe a way to 'hack' this using the existing functionality would be to set up a series of "mini" Roth conversions between now and one's RMD date? Yes. I think I'll give that a try.
