Originally Posted by Animorph
You should be taking advantage of your low tax rates, but do it by living off your taxable accounts and Roth converting as much of your traditional IRA as you can and still stay within the 15% tax bracket. Every dollar you pull out of your IRA now is a dollar that could go into a Roth IRA and avoid future capital gains and dividend taxes. If effect you are still drawing down your IRA, but in the process you are transferring some of your taxable funds into the non-taxable Roth account. You get the same RMD lowering effect as well. Ideally you want to pull everything from your IRA within the 15% tax bracket.
If I had to give only a single, one-size-fits-all piece of advice, it would be to follow Animorph's suggestion to live off of your taxable investments and convert as much of your traditional IRA to a Roth as possible while still remaining in the 15% tax bracket. But I can think of scenarios where this strategy would backfire, so you should be aware of the pitfalls in case they apply to you:
1. Suppose your taxable accounts are all stocks or mutual funds with sizeable unrealized capital gains, and that selling these investments and realizing the gains would put you close to the top of the 15% tax bracket. Then you wouldn't have any maneuvering room to make annual Roth conversions. You would then be in danger of maintaining such a large balance in your traditional IRAs that future RMDs would push you into the 25% tax bracket. In this situation you would probably be better off withdrawing part or all of your living expenses from your traditional IRA in order to reduce its balance prior to the onset of RMDs.
2. We all sincerely hope that our investments increase in value over the long run, but this isn't guaranteed. Suppose that you pursue the strategy of making Roth conversions and make investments with the amount converted that lose money over the long haul. Investments with long term losses would be better placed in either a taxable account or a traditional IRA.