Your Retirement Distribution Strategy

About Library of Financial Articles

Retirement is close. You can see it in the near future. You’ve worked hard to accumulate your resources, and you are facing the most important aspect of reaching retirement: how do you take distributions from all of your accounts so the money will last and in the most tax efficient way possible?

Even though each person’s situation is different, consider these factors as you near retirement:

1. Take an inventory of your retirement accounts. They could include:

  • 401 (k)
  • IRA/Roth
  • Social Security
  • Real estate
  • Pension/Survivor benefits

2. Understand how taxes affect each one.
You’re the 401(k) generation which is the first generation to experience taking required minimum distributions at 70.5 years old. There’s no way around this. You have to.

The government didn’t do you a favor. They basically allowed you to place money into a retirement account at a reduced tax rate, but it will cost you more interest and taxation down the road.

Breaking it down further, it’s like this. The longer you let that money sit in those tax-deferred accounts for taxation reasons, the more taxes you will pay. You will pay taxes on each dollar you put in AND on all the growth.

And remember, taxes are handled differently on EACH retirement account.

3. Create a monthly income plan.

  • What will your bills be each month?
  • How much money do you hope to have for activities, travel, eating out, etc?
  • What “unexpected” turns could life take in which you need to prepare?

Answering these types of questions will bring clarity to your retirement picture and help you develop your financial portrait.

4. Create a distribution strategy.
You need money coming in each month to cover the expenses in your income plan. And you need this money to NEVER run out. Because people are living longer, there is also long-term care to consider. So, this is when an expert comes in—all of that hard earned money that you worked to accumulate needs to be handled with expert hands. Seek advice from your financial advisor and WRITE down the plan.

About Library of Financial Articles

View The Best Annuity Rates Available Now

Annuities are a safe and reliable investment. They can transform your savings into a more predictable income. Speak with one of our qualified financial professionals today to find out how an annuity can offer you guaranteed monthly income for life.

Our unique system of “Pooled and Shared” articles by our authors, our outside contributors, and writing assistants provides efficiency, enhanced collaboration, and greater topic accessibility. This allows for a better utilization of content and productivity while delivering meaningful content to our readers.

Content in our posted articles is deemed to be accurate but topics, facts and laws can change. It is always a good idea to verify facts before making decisions. Always seek authorized and professional advice regarding financial decisions which includes investing, annuity purchases, tax planning, changes in a financial portfolio and retirement planning.

Share This Entry:

In This Article

Protect Your Retirement

Our 20th edition of The Safe Money Guide, the standard of the industry.

Recent Posts