Retirement withdrawals

In an analysis stretching back to 1926 of 75 different retirement scenarios, Craig Israelsen compares five different retirement portfolio withdrawal strategies, from a fixed annual amount to the 4% rule and RMD withdrawals.

Signed into law last December and now partly in force, the sweeping retirement overhaul package presents new planning opportunities for millions of Americans and financial advisors.

After a waiver, required minimum distributions from certain retirement accounts — including traditional IRAs and 401(k)s —return for 2021.

A comprehensive guide to how these provisions affect retirement plans

Those who don’t pay them back could lose up to 45% of their potential savings.

Early withdrawals from retirement accounts may be unavoidable in today’s economic climate. You can help mitigate the damage.

How will the relief package impact retirement accounts? CPA Ed Slott fields this and other top financial planning queries.

Under the new act, some can take out as much as $100,000 from retirement plans early without penalty.

Seniors should focus on what they can control — such as their reaction to market volatility and their long-term savings.

“[By extending the tax deadline], they automatically extended the deadline to make an IRA contribution last year,” an expert says.

Clients are advised to minimize spending and tap possible sources of cash and credit, including their tax refund.

Retirees tapping their long-term savings accounts for income in an emergency are advised to strongly consider reducing their withdrawal rates.

These retirement vehicles can be less complex and cheaper than alternatives.

“Find ways to generate income,” says one financial planner.

To ensure their investments stretch as long as they live, clients are advised to develop a sustainable withdrawal plan and consider annuities.

Interestingly, the measure often used by analysts and planners just happens to be the one that doesn’t reflect how most clients actually invest or withdraw money.

Aside from income taxes, retirees will also pay consumer taxes and may face a 3.8% Medicare surtax.

Seniors choosing between traditional and Roth IRAs must account for their current and future tax rates.

The Social Security retirement rate is based on their highest 35 years of wage-indexed earnings.

The spike in the number of older employees in the workplace reflects a trend over the past decade.