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Retirement Jenga: Your Withdrawal Strategies

Today’s topic is withdrawing from your retirement account, which can sometimes seem like a game of financial Jenga. One wrong move and you could end up drastically impacting how much money you have to last you during your retired years.

So in order to avoid toppling your retirement portfolio, you shouldn’t take on more risk or change up your strategy last minute.

In fact, the secret may be consistency and building wealth by investing in low cost and broad indexed funds. You should also carefully evaluate which of your assets should go and when to sell them.

In addition to paying close attention to your assets, there are a few other things you should know. If you are worried about your retirement withdraw and how it’s impacting your funds, we’ve got you covered. Read on for more information!

Sell Your Fattest Cow

And by “cow,” we mean “asset.”

This actually might go against everything you know about retirement. If it’s valuable, you should hold on to it, right? Wrong.

If you are a smart saver, you’ll sell your most valuable asset off first. If stocks are performing well, sell them before your bonds and vice versa. This way, you’re selling for more and you can stash away what you made from selling and use it before you begin dipping into your retirement fund.

Of course, before you sell anything, you should always speak to an expert.

Delay Your Social Security

We cannot hammer this one in enough, which is why it keeps popping up in our articles. You know by now that you should have saved enough without supplementing your pension with Social Security.

If you delay your Social Security benefits, you accomplish two things:

  1. You earn a delayed retirement credit of roughly 8{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} annually until you collect your benefits. This begins at age 62 and continues until the age of 70.
  2. You learn to not rely on Social Security. By delaying when you claim your benefits, you are inadvertently teaching yourself to be more frugal with your pension. This – theoretically – means it will last you longer.

Plan Ahead

This one is perhaps one of the most important things you can do for your retirement account. Be sure to plan ahead for any mandatory withdrawals.

Once you turn 70 ½, you are required to draw from your tax-deferred IRA account and your 401(k) account, and you will have to begin paying taxes on your withdrawals. So you want to make sure you are withdrawing enough every year while you are in a lower tax bracket.

We advise getting a good accountant or financial adviser. These individuals are experts in their field and can help you figure out which form of retirement investing is right for you and which withdrawal strategy will work best for you in your future.

A financial adviser is especially important when you’re deciding to switch your money from a traditional IRA into a Roth IRA, as he or she will be able to help you assess how much risk you can take on and how this transition will impact your future savings. An adviser can also help you decide how much money to withdrawal and when – without ignoring any mandatory withdrawals you must make.

Essentially, what an adviser does is help you strategically plan your retirement so that your money can last you for the duration of your retirement.

Bottom Line

Ultimately, your retirement withdrawals should work for you, You have worked hard for your money – too hard to lose it all by making mistakes once you are retired.

We have said this before and we’ll say it again: your retirement plan doesn’t end once you have retired. In fact, your post-working years are when it is more important to keep a watchful eye on your funds and where your money is going.

Ultimately, you can have the retirement you’ve always dreamt about. You simply have to make sure you are planning for it. We understand that stashing your extra money away for the future can be a tedious task and we know a budget is not always easy to stick with. That’s why we are here to help you.

Your savings plan and your withdrawals don’t have to be anxiety-inducing and they don’t have to put a damper on how you live day-to-day. By putting forth a little effort now and keeping an eye on the bigger picture, you can ensure that your pension fund will last you throughout your retirement.