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2810 Fieldstream Drive North
Wilson, NC 27896
Phone: 252-237-4357
Fax: 252-243-2681
November/December 2018
Ready, Set, Spend
After a lifetime of saving, you’re ready to retire. Now it’s time to do something some retirees find hard to do: Shift from a saving to a spending mindset.
Big Transition
If you’re like most people, the idea of draining your retirement funds after spending years building them up can be an initially scary thought. This is understandable. Remember, though, this time of your life still involves planning — just a different type than before.Strategy Shift
One of the first things you should do even before retiring is to forecast all of your expected income from retirement plans, annuity payments, Social Security and other sources. You can expect Social Security and possibly annuity payments (if you have the lifetime income option) to last a lifetime, but your other income is finite and requires a distribution plan.Working closely with your financial and tax professionals, determine how long your 401(k) and other investments need to last, and then create a distribution strategy that results in a regular income stream.
This strategy should also take taxes into account. For example, cashing in your retirement plan balance and not reinvesting it in a similar tax-qualified investment promptly can create a big one-time tax event, so plan accordingly.
Beyond budgeting living expenses, decide what is important to you so you can make wise decisions about spending discretionary funds.
Distribution Strategies
You must begin taking 401(k) and traditional IRA withdrawals in the year after reaching age 70 ½ or face a penalty on the required amount not withdrawn. These “required minimum distribution” rules don’t affect Roth IRAs. Even in retirement, you may want to invest a portion of your portfolio for growth because annual inflation is likely. Talk to your advisor to learn more.CONTACT US
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Active Planning & Investment Solutions and LTM Client Marketing are unrelated companies. This newsletter was created by LTM Client Marketing and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Avantax Wealth Management® or its subsidiaries.
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