Here is my situation. I will reach the minimum age (55) at which I can tap my pension later this year and plan to retire at that time. The pension is worth $440K and I plan to take it in 10 equal annual installments of $44K. We are budgeting $60K per year between retirement at age 55 and age 59.5 when I can tap my retirement accounts (401K, IRAs, 403b) that are currently valued at $1.1M. To fill the gap between the $44K pension and the $60K budget, I have $30K in CDs, $30K in US Savings Bonds (yes savings bonds) $52K in Franklin Templeton California Bond fund. Also about $20K in cash. Which money should I use first? Is it as simple as using the lowest yielding money first? That would be the CDs and cash. Some of those old savings bonds are earning over 4%. The Franklin Templeton CA bond fund is yielding a little more than that. What about taxes? Should that influence my decision?