Retirement Income Planning shares so many similarities with gardening. That’s probably why I love both, gardening as a hobby, and retirement planning as profession.
This time of the year is poignant as we’ve already planted our garden and then we begin to plan for the first harvest. Whether it’s picking the flowers, fruit or veggies, it helps to know the optimal time to pick and the right way to cut, pick or harvest to keep the plants flourishing and producing all through their growing season. Likewise, depending on where you are, either retired or still in the planning stages, knowing where to draw your income from at the right time and in the right way will keep your portfolio producing a healthy income.
Not only will the source of the income continue to grow, when you know how to harvest correctly you will have maximum enjoyment of the fruits of your labor. Just like in your garden.
Which Accounts To Draw From First
When you have a variety of sources from which to draw, which means you’ve planted wisely, you’ll have more options. Typically, if you have a pension, it makes sense to draw from that and Social Security first. That way, you’ll be able to defer drawing from your IRA and/or 401k until age 70½. That’s the age at which you’ll have to take the required minimum distributions (RMD).
Roth accounts have no mandatory distribution dates, so they can be deferred until later in life. Or you can even leave them to grow tax free for your beneficiaries.
Like Every Individual Every Garden Is Unique
Gardening is enjoyable when you know how to do it correctly and can reap abundantly from your efforts. Retirement planning can also be a source of great enjoyment. However, you have to take into account that your circumstances are unique. Be sure to discuss your planning options with a Fiduciary Financial Advisor whose speciality is Retirement Planning. Otherwise you could be planting on fallow ground.
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