If you’re retired, or you’re approaching retirement, there’s a decent chance that you’ve got some money saved up in what’s known as a “qualified” retirement plan – meaning one that gave you a deduction going in, is tax deferred while it grows, and then will be taxable when the money comes out. In general, we’re talking about a 401k, 403b, or something your company set up that is not a government plan.
Since you’ve been saving that money for retirement, you may have wondered when the best time to take that money out might be. If you need it to fund your daily expenses, then the answer is easy: take it out as you need it. But if you don’t need the money right now, is it a good idea to leave it in the retirement plan until you’re mandated to take some out at age 72, or should you begin taking withdrawals before that time?
It’s all about tax management. Many advisors will take the lazy way out and tell you to always wait until later. But we don’t look at it that way. Find out why you may want to tap into your 401k earlier than the conventional wisdom suggests with advice from “Professor” Rick Plum, CFP®, as he speaks with podcast host Johnny Dean on this week’s episode of Managing Your Financial Future!
