"TRA 97 ... changed the maximum long-term capital gains rate to 20% for those in a 28% or higher marginal income tax bracket. Those in a 15% marginal bracket have a maximum capital gains rate of 10%. For the long-term, buy and hold (LTBH) investor, that change dumps conventional wisdom upside down and turns it on its ear. With the change in capital gains taxation rates, a retiree who uses a LTBH strategy may benefit her family far more by taking money from a traditional IRA first, and using a taxable account only when the IRA runs out. Sounds weird, doesn't it? Yet under current tax laws it's absolutely true. In a bit, we'll see why."