When can I start withdrawing from my banked balance after switching to the embassy letter method for my retirement visa in Thailand?

Technically you have to keep your 400k baht for “the rest of the year” of your extension, means until 19 June 2024. But as you already got a new yearly extension, the chance of being checked the balance in your account would be a slim (but cannot guarantee on any single different scenario). Your decision which way you want to go.

IF you are now using the Affidavit of Income letter from your home country Embassy, there's NO requirement for you to have funds on deposit in a Thai bank account in your name only.

However, you will need to satisfy the requirements of your home country Embassy for issuing the Affidavit of Income letter to Thai Immigration.

Your Thai Immigration office also can ask you for verification of your income or the documents which you used to obtain the Affidavit of Income letter from your Embassy.