4. Withdrawal smarts
Here’s the issue with Individual Retirement Accounts (IRAs) and 401(k)s: Age- and tax-related
rules necessitate a Required Minimum Distribution (RMD) at a time prescribed by the IRS.
But be conscientious about tapping these accounts,
and, if possible, try not to take out so much that your tax bill chews up your savings. Remember,
too, that your withdrawal rates need to be sustainable over the rest of your life. Withdrawing too
much could easily impact that steady stream of income you’re looking for and one long-followed standard,
the 4% rule, may help you keep it constant. Keeping in close contact
with your financial professional in retirement could free up your time and help ease your mind. In other words,
the pros can help. There are plenty of rules and changing tax laws that can crimp your "take-home pay" if
you have a misstep. For starters, pay attention to IRA and 401(k) withdrawal rules so you avoid penalties.
Also keep in mind that pulling money out of traditional IRAs and 401(k) plans boosts your taxable income.
This could make more of your Social Security benefits subject to income tax, pushing you over certain thresholds
for higher tax brackets, and so on. Now, if you have a Roth IRA, your withdrawal from the Roth may be tax free,
dependent on certain circumstances. Be sure to consult with a tax professional to determine how taxation applies to your situation.