The Dos and Don’ts of Retirement Withdrawal Strategies

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Do: Consider your retirement income needs and tax implications when deciding which accounts to withdraw from first

Don’t: Withdraw too much too soon and risk running out of money later in retirement

Do: Develop a withdrawal plan that balances income needs with preserving the longevity of your retirement savings

Don’t: Forget to account for required minimum distributions (RMDs) from tax-deferred retirement accounts once you reach age 72

Do: Continuously reassess and adjust your withdrawal strategy as your financial needs and circumstances change

Don’t: Make emotional decisions about withdrawals based on short-term market fluctuations

Do: Consult with a financial advisor or tax professional to optimize your retirement withdrawal strategy

Do: Consider the potential impact of inflation on your retirement income and adjust your withdrawal rate accordingly to maintain purchasing power over time.

Don’t: Rely solely on withdrawals from retirement accounts without considering other potential income sources, such as part-time work, rental income, or dividends from investments.

Do: Factor in potential healthcare costs and long-term care expenses when planning your retirement withdrawal strategy, including setting aside funds for medical emergencies or assisted living expenses.

Don’t: Forget to regularly review and update your estate plan, including beneficiary designations on retirement accounts, to ensure your assets are distributed according to your wishes and to minimize tax implications for your heirs.

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