Your client is about to retire – what accounts do they withdraw from first? While retirees can start taking 401(k) withdrawals without penalties as soon as they turn 59 1/2, they may want to start drawing from their taxable account for their living expenses if this account generates interest and dividends, according to this article from USA Today. “The longer that you are able to leave the money within your 401K plan or IRA rollover — if you choose to roll it over — the longer it will remain invested on a tax-deferred basis,” says an expert. “This means that you can avoid paying taxes for longer which will result in accumulating more funds."
Why couples must plan for Social Security together There are 567 ways to claim Social Security retirement benefits, but clients are advised to pick a strategy that will maximize their spouse's benefit on their record, according to this article on Kiplinger. While spousal benefit will be 50% of their primary insurance amount whether they file before or after their full retirement age, survivor benefits will be computed based on their actual retirement benefit. This means that men are advised to delay their retirement benefit to boost their wife's survivor benefit, as women are more likely to outlive their husbands.
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