|Generally, you have to be at least 59-1/2 to withdraw money from your 401(k) and traditional IRA without incurring a penalty. If you don’t need the money, you can leave your accounts alone, but you will have to start taking withdrawals when you reach 70-1/2. If you have a Roth IRA, however, you currently face no mandatory distribution rules.
As for Social Security, you can start receiving payments when you reach 62, but your monthly checks will only be about three-fourths of what you’d receive if you wait until you reach “full” retirement age of 66 or 67.
Before taking any withdrawals, consult with your financial and tax advisors. Your withdrawal decisions are usually irrevocable - so get them right the first time.
Smart Portfolio Moves For Your Retirement Years
When you retire, you may need to change some of your investment strategies. But what type of moves should you make?
For starters, you might want some income-producing vehicles, such as investment-grade bonds, government securities and Certificates of Deposit (CDs).
However, even if you do need some of your investments to provide you with an income stream, you can’t ignore the need for growth - because you’ll have to contend with inflation.
That’s why you still should consider some exposure to stocks, which offer the potential to provide returns greater than the inflation rate.
Of course, you will incur investment risk, including loss of some or all of your principal, but you may be able to help reduce your risk level by buying quality stocks and holding them for the long term.
In any case, by making the right investment decisions, you can make your “golden years” considerably brighter.
Contact Wendell at Edward Jones www.edwardjones.com.