| “When
you liquidate funds, don’t get burned.”
There are definitely ground rules when it comes
to turning savings into spendable income. Chief among those
rules is: Don’t cash in savings until you truly need the
money, or are required to take income. This is especially true
for employer-sponsored-plan savings. You can leave savings in
your plan – to reap tax-deferred accumulation potential
– until age 70 1/2 (when you have to begin at least minimum
annual distributions). On the flip side, once you begin withdrawing
money in retirement, you’ll owe income tax on each payment.
While your money is still invested, also be sure to continue
to follow rules of diversification and asset allocation to balance
your risk. When you do dip into your money and start liquidating
savings, here’s what we suggest.
• Taxable first
• Tax-deferred last
• How much to take
• How to manage efficiently
|
Are You Nearing Retirement?
