Retirement Accounts: When to Withdraw Money & Get the Most Bang For Your Buck

Retirement Accounts: When to Withdraw Money & Get the Most Bang For Your Buck

June 14, 2021

How confident are you in your financial planning?  You're not alone if you're feeling a little insecure about it.  One study found that 71% of U.S. adults admin that their financial planning could use some work- but only 29% actually have an advisor of some sort to help them with it.

Hmmm.. doesn't seem logical right?  Well, you know we're always here for you, but for now, here's Withdrawing From Your Retirement Accounts 101.

Take a holistic look at your financial profile.  All of your investments, all of your assets, and get firm on what you really have to work with. 

Now, picture this:  You're tight on money- and you're looking past just your bank accounts for some help.  Where do you look first?  Probably the "extra money" you're throwing into investments right?  Stop right there!!!  Do not start with your investment income!  Check with your fiduciary to see if this is the case for you, but most investment accounts are taxable- so you'll have to pay capital gains taxes on withdrawals.

After seeing your money grow, it may be tempting to tap into that!  What's the harm if your money is going to keep growing? RMD's (Required Minimum Distributions) aren't required until you turn 72.  You can start withdrawing money at 59 1/2.  But, if you do, you're disturbing the interest that could be compounding.  12.5 years of interest!  Bottom line, leave this money alone!

Lastly, social security benefits.  Wait as long as you can, at least until you are 70.  Payments increase by 8% each year you wait, and you're entitled to that!  Take advantage of it.

Now- you may be thinking.. "So what CAN I do?"  Well that depends- every situation is different.  To be sure the sequence of withdrawing money is optimal for you, experts recommend you speak with an advisor.  Having another set of eyes can provide a peace of mind that you are doing what's in your best interest.

As always, let us know if we can help.

Info from: