It’s never too early to start thinking about saving for retirement. After all, the sooner you start putting money away with the help of your financial planner, the more money you will have to enjoy life once you’re done working. It takes smart planning to make your retirement last for a lifetime, and that means being smart about your distributions, as well. Every person has a unique financial situation, so it’s wise to discuss your needs with your retirement planner in order to maximize the amount of money you have. Read on to learn how to be smart about your distribution planning decisions.
When to Take Distributions
There are two main categories of when you can take retirement account distributions: before the age of 59 ½, and during and after the year you turn 59 ½. If you take distributions before you are 59 ½, you may be subject to a penalty from the IRS as well as standard income tax. That’s why it’s a wise idea to look for other financial solutions before dipping into your retirement savings early. Taking distributions after you turn 59 ½ does not come with any penalties.
Delaying Distributions
Many people choose to delay taking retirement distributions for as long as possible by continuing to work a little bit longer. That way, you can save a bit more money and leave more in the account for when you do actually start taking distributions. However, everyone must start taking distributions eventually, as the IRS has a minimum mandated distribution amount for individuals over the age of 70 ½. It is important to note that funds in Roth IRAs are not subject to the same minimum distribution rules. If you are unsure of how to best plan your retirement distributions, talk to your financial planner.
You can trust Financial Directions, LLC to provide you with expert retirement planning advice based on years of experience. Contact our Tucson offices at (520) 408-7777 to set up a consultation with one of our retirement advisers. Visit us online to learn more about what we do to help you have a financially stable life.
