![]() Things just don’t work like they used to! You can expect one particular expense to increase as you get older- health care. If you want to let your Roth account grow and grow, you could theoretically never touch it (if you have other funds to live on) and leave it to one of your beneficiaries once you’re gone.Īs you age, you’ll notice a lot of new aches and pains. As far as Uncle Sam is concerned, you don’t have to take any money out of a Roth account ever! You’ve already paid income taxes on that money. If you’ve been saving in a Roth account, you don’t need to worry about RMDs. It’s important to remember that these will be taxed like regular income, so make sure you’re setting aside money to pay for those taxes! Use the RMD worksheets on the IRS’s website to understand how much you’ll be required to take out of your account. How much will you need for retirement? Find out with this free tool! The IRS requires you to start taking money out of your retirement account at either 70 or 72, depending on the year you were born. ![]() If you have a traditional retirement account, like a 403(b) or 401(k), you need to be aware of required minimum distributions (RMDs). In theory, your portfolio will continue to grow (if you keep it all well-balanced in the right mutual funds). The main thing is to make sure you’re not pulling out so much that you “kill the golden goose” and stop the growth on what you still have invested. Don’t risk a big mistake-your future is too important! An investment pro will help you navigate all the debate about how much to pull out and when to do it. We can’t emphasize how important it is to work with an investment professional as you make these calculations. Planning when, how and from which accounts you’ll take distributions is a crucial part of creating your retirement budget. Most likely, your 401(k) or IRAs will be your biggest “bucket.” When you reach a certain age, you’ll begin to take distributions (or withdraw money) from these accounts. From there, you can break it down into monthly income. This is a rough ballpark number for your annual income. Total up your projected income based on all of these revenue streams, then divide that number by how many years you plan to live in retirement. Annuities are an insurance product that many people use to fund their retirement years. ![]()
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