RMDs Can Help Ensure Financial Liquidity in Retirement
Financial articles frequently present thoughts on spend-down rates for tax-deferred accounts–IRAs and 401Ks, for example–that can keep you from depleting your retirement savings base too early. Some say 5%, some say 4%, recognizing that the final outcome is based on longevity and investment returns during retirement. There is another way to look at the issue, however, and that involves an understanding of the Required Minimum Distribution rules in effect governing the mandatory distribution of funds from accounts of this type. Craig Israelson, executive-in-residence at Utah Valley University’s financial planning program, suggests that “(t)he RMD is not your enemy. It provides sound guidance” in managing the long-term use of accumulated savings. A www.thinkadvisor.com article recapping these thoughts, concludes “(r)etirees won’t run out of money before age 95 so long as they don’t withdraw much more than the required distribution, according to Israelson.” Read the article here…
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