It’s one of the first questions I’m asked when someone first comes in for retirement planning. Being used to working and receiving a paycheck on a regular basis, where will my “paycheck” come from now? Often people don’t understand how the pile of savings they’ve accumulated up to retirement gets translated into income. Of equal importance to them is making sure that when they do tap into their savings they are doing so in a way that optimizes their pile of cash.

If you have wondered where to go for money in your portfolio to meet your income needs, here’s a helpful guide.

First of all, there isn't a cookie-cutter answer to where to take withdrawals from. An investor's strategy should be determined by age and tax rate when taking the withdrawal, which changes as time goes on. In fact, it’s often a good idea to pull money from multiple account types during each year of retirement. Generally account types consist of tax-deferred like traditional IRAs and 401(k)s, tax-free like Roth accounts, and taxable accounts. A key focus when developing your withdrawal strategy, however, should be preserving the tax-saving benefits of your tax-sheltered investments --the 401(k)s, IRAs and Roth accounts--for as long as you possibly can.

As long as you have both taxable and tax-sheltered assets, it's usually best to hold on to the accounts with the most generous tax treatment while spending down less tax-efficient assets. With that in mind, the following sequence will make sense for many retirees.

If you're over age 70 1/2, your first stop for withdrawals are those accounts that carry required minimum distributions, or RMDs, such as traditional IRAs and company retirement plans. You have to take this money out anyway, otherwise you'll pay penalties if you don't take the distributions on time.

If you're not required to take RMDs or you've taken your RMDs and still need cash, turn to your taxable accounts. For the most part, relative to assets held in tax-deferred or tax-free accounts, these holdings have the highest costs associated with them while you own them. Start by selling assets with the highest cost basis first and then move on to those assets where your cost basis is lower (and your tax hit is higher). Something to keep in mind, however --taxable assets could also be valuable to tap in your later retirement years because you'll pay taxes on withdrawals at your capital gains rate, which is usually lower than your ordinary income tax rate.

Next tap tax-deferred accounts like company retirement-plan accounts and traditional IRAs. Because of their nature as a tax-sheltered accounts, allowing these assets to grow at returns unhindered by taxes can optimize their value long-term. You’ll still have to pay ordinary income tax on any distributions once withdrawn, but in conjunction with other sources, your total impact can be minimized if planned correctly.

Save Roth IRA assets for last. In a Roth you get the best of both worlds – optimized returns in a tax sheltered account and tax free withdrawals in retirement. Roths are an especially good source to help pay for unexpected big ticket items in retirement; taking a large lump sum out of a Roth has no impact on your taxes so long as it’s a qualified withdrawal (meaning you’re over 59 ½ and the money has been in the Roth account for more than 5 years).

Withdrawal guidelines are just that--guidelines. There may be good reasons to use a different sequence than what's outlined above. As I mentioned in the beginning your strategy should ultimately be determined by your age and tax rate when taking the withdrawal, so plan accordingly.