Review: We all know to put money into retirement accounts — what’s the best strategy for taking it out?

Review: We all know to put money into retirement accounts — what’s the best strategy for taking it out?

There’s a pretty serious disconnect about how people talk about investing. Everyone is always talking about how to get higher returns, what the market is about to do, or what the “right” savings rate is – but they don’t talk about what your investment distribution strategy should look like. If you’re saving and investing for retirement (and if you’re reading this, presumably you are) then you are eventually going to use your money. And how you take your money out can make a big difference in your retirement income. This article focuses mainly on options within defined contribution plans, in other words, 401(k)s (check out our ebook for more on how to improve your company’s 401(k) plan to help your employees prepare for retirement). It’s an interesting discussion, but there’s a broader question of distribution strategy. Your investments are (generally) broken up into three different tax categories: taxable accounts, tax-deferred accounts, and tax exempt accounts. They all act a little bit different, so you want to take those differences into account when you are drawing your income from them (and when you’re setting up your portfolio). Vanguard’s Advisor Alpha study says using an effective spending strategy can add the equivalent of […]

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Source: Retirement Researchers

Review: We all know to put money into retirement accounts — what’s the best strategy for taking it out?

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