How to Draw Down Retirement Assets
As you approach your retirement, one of the first things you may wonder is how to draw down your assets. How much money can you take out of your IRA, Roth IRA, 401(k) or other savings, investments and liquid assets, and still feel confident that your money will last the rest of your life? What laws will affect the amount of your withdrawal? What asset withdrawal system will work the best for you?
Start with a Retirement Budget
The first thing you need to do is carefully list all of your current expenses and come up with an accurate budget. Next, go through the budget and adjust it to account for any expenses that you believe will be higher or lower after you retire.
For example, if your employer currently pays for your medical insurance, or you have a company car, those expenses may be higher after you retire.
On the other hand, if you currently pay high individual insurance premiums and you plan to use a Medicare Advantage Plan with low premiums after retirement, your medical expenses may be lower. In addition, if you have high fuel and auto costs due to a long commute, those expenses will be reduced, too.
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