If you’re retired or nearing retirement, you know how long you’ve been saving for your best years. Are you ready to manage your distributions well and budget correctly? If not, you may run out of money. Consider these tips when you’re making (or revising) your retirement plan so you don’t spend too much, incur penalties, or leave money on the table.
Think about the three stages of retirement, and budget accordingly. We’re talking about early retirement (travel, hobbies, etc.), middle retirement (socializing, activities, relaxation), and late retirement (winding down, most days at home).
Hammer out a plan for Social Security. You could aim to start collecting as soon as possible, so you can save your other sources of income for later in your retirement. If you're still working or have other sources of income, you might choose to delay collecting Social Security to get you a more significant income later on.
Plan for your required minimum distributions (RMDs). When you hit age 70 ½ you will be required to withdrawal annually from your retirement accounts. Certain plans, like 401(k)s and 403(b)s allow you to delay withdrawals until after age 70 ½ if you are still working. For traditional IRAs though, you’ll need to withdrawal at age 70 ½, regardless of retirement status.
How’s your retirement distribution strategy? Could it use some help? We’re here for you. Feel free to call us at (253) 327-1177 and we can help create a distribution plan that works for you.