4% Rule
The 4% rule is a well-known retirement strategy that withdraws 4% in the first year and adjusts for inflation annually, working best when you have additional income sources.
Total Return Approach
A total return approach is similar to the 4% rule but differs by withdrawing income first from investment sources like annuities, dividends, and returns before tapping into savings, helping preserve principal as much as possible.
Take Fixed-Dollar Withdrawals
Fixed dollar withdrawals may seem appealing, but they don’t account for investment performance and involve taking a set amount from your retirement fund at regular intervals.
Create a Floor
A retirement income floor is a safe strategy that uses secure income sources like pensions, annuities, and Social Security to cover expenses with less reliance on market performance.
Use Account Sequencing
Account sequencing is a tax-efficient retirement strategy that involves withdrawing from different investment and savings accounts in a strategic order to minimize taxes.
Withdraw a Fixed Percentage
A fixed percent withdrawal uses an unchanged rate rather than adjusting for inflation and requires careful planning based on your savings age income needs and market risk.
Bucket Your Money
The bucket strategy offers flexibility by dividing savings into separate accounts based on timelines, such as short-term cash, mid-term investments, and long-term growth funds.
Minimize Mandatory Distributions
Required minimum distributions are mandatory withdrawals from certain retirement accounts starting at age 72 and missing them can cause major tax penalties, so strategies like shifting funds to a Roth IRA can help reduce taxes.
Limit Withdrawals to Income
Limiting withdrawals to investment income can be a very safe strategy that preserves principal but works best with large balances and steady returns, and may be less reliable in volatile markets.
