Managing a 401(k) after retirement can be challenging, as many retirees find spending their accumulated savings is more complex than saving them. A Reddit poster, age 55, is preparing for retirement and contemplating how to manage their 401(k). The article emphasizes the importance of mapping out a retirement budget and determining a safe withdrawal rate, traditionally suggested at 4% adjusted for inflation. However, individual circumstances, such as retirement age and life expectancy, influence this decision. Seeking advice from a financial advisor is recommended to navigate these complexities.
Many people find it easy to fund a 401(k) during their careers, but the tricky part arises once retirement rolls around and it's time for that money to be spent.
Mapping out a retirement budget is crucial to figure out living expenses and establishing a safe withdrawal rate from a 401(k) to avoid depleting funds.
While many consider 4% a safe starting withdrawal rate, individual factors like retirement age and life expectancy can influence whether this will work for a retiree.
It's not uncommon to leave money in a 401(k) plan during retirement, but the key challenge is determining how to spend it safely.
#401k-management #retirement-planning #financial-advice #withdrawal-strategies #budgeting-for-retirement
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