Once you retire, the need for a steady paycheck doesn't disappear. You still need to pay monthly expenses, which may have shifted to travel plans or health care needs. Be judicious about drawing down investments and continue to think long-term about your retirement paycheck.
Determine retirement income sources such as 401(k), Social Security or employer pensions. Your timing in taking benefits can influence the amount of income you may receive. Calculate your estimated Social Security benefits at ssa.gov. Continue to monitor your expenses and save for retirement even as you draw down your nest egg.
Figure out an initial income distribution plan. Include timing and tax implications, and don’t forget Required Minimum Distributions begin at age 70½ for qualified plans. If you're already in retirement, consider setting up automatic payments to a checking account.
It can be easier to estimate needs, make withdrawals, and even keep administrative costs down when you consolidate accounts. If you've changed jobs, consider rolling over 401(k)s to an Individual Retirement Account (IRA). Keep fees, charges and changes in investment options in mind. Talk to your tax advisor before consolidating.A2F Learn more about 401(k) rollovers
You may need to reach a minimum age before you access some retirement income sources. Social Security benefits are greater if you wait. Medicare isn't available until age 65, and you'll take a tax hit waiting past 70 ½ to take Required Minimum Distributions.A2F Take a look at the Important Retirement Dates guide for help.
Establish legacy plans to help ensure a smooth transition of assets to beneficiaries. Review account titles, beneficiary designations, create or update your will, and develop a health care directive.
As you seek to ways to help maximize your income stream, minimize tax impact, and potentially grow assets, make sure your asset protection and legacy plans are in place and up to date. Work with an attorney to create a will if you haven't already, and review the beneficiaries on all your accounts. Make sure you have a health care directive and give power of attorney to someone you trust. Learn about the cornerstones of retirement planning
A rollover of qualified plan assets into an IRA is not your only option. Before deciding whether to keep an existing plan, or rolling it into an IRA, be sure to consider potential benefits and limitations of all options. These include total fees and expenses, range of investment options available, penalty-free withdrawals, availability of services, protection from creditors, RMD planning, and taxation of employer stock. Discuss rollover options with your tax advisor for tax considerations.
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