How Do I Take Money Out of My Account When I Retire? | Ask a Savant Financial Advisor
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If you’ve made the decision to retire, congratulations! You’ve worked hard and you’ve saved enough money to feel confident as you transition into your retired lifestyle. But you may be wondering – “How can I actually take money out of these investments to replace my paycheck? How much is too much to withdraw? How can I be sure that I won’t run out of money?”
Here’s the bad news: there is NO one-size-fits-all solution. Rules of thumb about “safe” withdrawal rates get less relevant all the time. No, you can’t just set your portfolio withdrawal rate to 4% and forget about it. An effective retirement income distribution plan is truly unique for each person, and it’s not just about the numbers. Your personal values and expectations about retirement play a major role in determining the right retirement income solutions for you.
Here’s what I mean. Two people could have the exact same assets going into retirement, but my recommendations on how they generate their retirement income may be completely different, solely based on their values. Someone who wants to leave a charitable legacy should withdraw their assets differently than someone who is trying to maximize what is left for their children and grandchildren.
So, after I understand my client’s financial values and retirement expectations, we review their assets to determine what income sources they have, and the short and long-term tax ramifications of withdrawing from each source. At Savant, we use sophisticated planning tools along with our collective wisdom to help our clients build a sustainable retirement income distribution plan they feel comfortable with.
Here’s a little-known fact about retirement income planning: You still need to earn investment growth! You may think that by relying on portfolio income means they should move to a more conservative investment allocation. While this might have been reasonable when life expectancy was much shorter, today some people are spending at least 1/3 of their entire life retired. Getting the portfolio allocation right is a critical step in the retirement planning process.
My name is Jake and I am a Financial Advisor with Savant Wealth Management. If you’re ready to retire but aren’t sure how to set up your retirement income stream, feel free to contact us now.
Let’s figure this out together.
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