When we plan for retirement, we usually think about saving up and investing a lot. But once we retire, we’ve got to switch gears and think about how to use that money wisely.
We’ve compiled a list of four methods commonly used to withdraw money in retirement.
- The 4% Rule: This entails withdrawing 4% of your retirement savings in the first year of retirement, adjusting for inflation in subsequent years.
- Fixed-Dollar Withdrawals: This is where you withdraw a set amount of money each year for a certain number of years.
- Fixed-Percentage Withdrawals: This method involves taking out a certain percentage of your total investments each year.
- Systematic Withdrawals: This involves only withdrawing the income (such as dividends or interest) created by the underlying investments in your portfolio.
Are there other withdrawal strategies? Certainly. The strategy that is best for you depends upon your unique situation. If you’re approaching retirement or lack confidence in your current strategy, we’re here to help.
Source: “What Are Retirement Withdrawal Strategies?” BlackRock, 2023, www.blackrock.com/us/individual/education/retirement/withdrawal-rules-and-strategies. Accessed 7 Dec. 2023.