Check out all you need to know about a retirement spending plan

Check out all you need to know about a retirement spending plan

Take a look at all you need to know about a retirement spending plan. If you are about t retire you must start planning how to spend your money wisely. Keep reading and start planning!

Take a look at all you need to know about a retirement spending plan. If you are about t retire you must start planning how to spend your money wisely. Keep reading and start planning!

How much of your savings can you afford to spend if you want that money to last as long as you live? Which accounts should you consider drawing from first—your 401(k), your IRA, your taxable accounts?

You may have heard some broad guidelines about the “right” amount to withdraw each year and the optimal order for tapping your various sources of income. While there are often kernels of truth in these rules of thumb, they generally gloss over the fact that everybody’s retirement is different.

How much of your savings can you afford to spend if you want that money to last as long as you live?

According to one oft-quoted rule of thumb, retirees should look at tapping into about 4% of their wealth annually. But that’s just a rough guideline and one that doesn’t take into account variables such as the age at which you’re retiring and whether your income needs will change as you age.

Because the likelihood of your money lasting depends on a delicate balance between the rate at which your investments appreciate and the rate at which you withdraw income from them—to say nothing of inflation—your withdrawal rate is in some ways a reflection of your confidence that your investments will continue to grow, or at least not shrink relative to your withdrawals.

According to one oft-quoted rule of thumb, retirees should look at tapping into about 4% of their wealth annually.

Also, the conventional wisdom goes that you should withdraw from your taxable accounts first, then tax-deferred, then tax-free. That’s because the money you take from a taxable account (such as a brokerage account) is likely to be taxed at the rate for capital gains or qualified dividends, which varies depending on your tax bracket.

What is more, delaying the start of your benefits until age 70 may give you a larger monthly payment than if you claim them earlier. 

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