Drawing a monthly check from your 401k.

[brownmonster]

Has anyone started taking money out of their 401k for it's intended purpose of augmenting your monthly income upon retirement? Can you withdraw it monthly directly form the 401k or does it have to be converted into an IRA first? Any one consider turning it into an annuity so you get a gauranteed check until you die?

[rod]

I've been drawing $500 a month out of my IRA for 9 years now. I draw it out of a separate Hartford acct. that was set up just for this purpose. Right now there is just a little less left in it than when I started drawing on it. At the rate it is going down I figure I only have about 45 more years left before it dries up at which time I will be 107 years old and will probably have other things besides money to worry about. Get yourself a good financial adviser----you won't regret it. I've got a couple of retired UPS friends that thought they were smart enought to do their own financial planning and they have pretty much wiped out their savings and are back working full time at crappy jobs just to make ends meet.

[raceanoncr]

working full time at crappy jobs just to make ends meet.

That's what I was doing BEFORE I retired!!!!!

[mattwtrs]

A good financial adviser is worth their weight in gold. A few years ago his advice saved me almost $20,000 in taxes to the IRS.

We talk every couple of months and meet once a year. He usually asks if I need any more of my money in my monthly check. I tell him not yet.

I am not withdrawing any 401K or IRA money yet. Those checks will be my cost of living increase in a few years if needed.

I am a few years away from SS so a good plan seems to be working.

[Can You Come Back?]

FWIW

I would roll the 401k to an IRA as soon as possible after separating from the company. There are just too many negatives about keeping it in the 401k.

You have thousands of more choices on the ways to invest in an IRA. Mutual funds, individual stocks, bonds, even just holding it as cash. More choices.

The 401k doesn't provide for a cash position, except in the self managed account.

Withdrawing money from an IRA in retirement is easy as a phone call or click.

I'm not interested in annuities. There are many types and are sold by insurance companies, which should be your first caveat.

Be sure to understand completely, any financial instrument before participating in it. You should be able to tell some one else how it works and have them completely understand it.

Not interested in the size of your nest egg, but a $500,000 egg invested in a series of mutual funds earning an average of 8% over a 20 year or more history would provide an annual income of $40,000 without ever touching the egg. Now, I like that "annuity".

Good luck in your retirement, must be coming soon ...... just like mine.

[UpstateNYUPSer]

CYCB, thanks for the info. Are they are tax consequences from rolling the 401k in to a traditional IRA? I know that there are if you roll in to a Roth.

[grgrcr88]

I've been drawing $500 a month out of my IRA for 9 years now. I draw it out of a separate Hartford acct. that was set up just for this purpose. Right now there is just a little less left in it than when I started drawing on it. At the rate it is going down I figure I only have about 45 more years left before it dries up at which time I will be 107 years old and will probably have other things besides money to worry about. Get yourself a good financial adviser----you won't regret it. I've got a couple of retired UPS friends that thought they were smart enought to do their own financial planning and they have pretty much wiped out their savings and are back working full time at crappy jobs just to make ends meet.

Tell me, What did you do as an active employee to accumulate your retirement nest egg? Strictly 401k, desp, or some other form of investing?

[brownmonster]

FWIW

I would roll the 401k to an IRA as soon as possible after separating from the company. There are just too many negatives about keeping it in the 401k.

You have thousands of more choices on the ways to invest in an IRA. Mutual funds, individual stocks, bonds, even just holding it as cash. More choices.

The 401k doesn't provide for a cash position, except in the self managed account.

Withdrawing money from an IRA in retirement is easy as a phone call or click.

I'm not interested in annuities. There are many types and are sold by insurance companies, which should be your first caveat.

Be sure to understand completely, any financial instrument before participating in it. You should be able to tell some one else how it works and have them completely understand it.

Not interested in the size of your nest egg, but a $500,000 egg invested in a series of mutual funds earning an average of 8% over a 20 year or more history would provide an annual income of $40,000 without ever touching the egg. Now, I like that "annuity".

Good luck in your retirement, must be coming soon ...... just like mine.

Your amount is the goal I hope to reach with the wifes and mine combined at retirement. The 8% a year sounds great but 500K invested in the market in 1999 would be worth 4 something now. Hope the next decade is a little closer to the historical average.

[brownmonster]

I've been drawing $500 a month out of my IRA for 9 years now. I draw it out of a separate Hartford acct. that was set up just for this purpose. Right now there is just a little less left in it than when I started drawing on it. At the rate it is going down I figure I only have about 45 more years left before it dries up at which time I will be 107 years old and will probably have other things besides money to worry about. Get yourself a good financial adviser----you won't regret it. I've got a couple of retired UPS friends that thought they were smart enought to do their own financial planning and they have pretty much wiped out their savings and are back working full time at crappy jobs just to make ends meet.

Rod, at what age did you start withdrawing from the IRA? Didn't you just turn 62 recently and start collecting SS?

[rod]

Rod, at what age did you start withdrawing from the IRA? Didn't you just turn 62 recently and start collecting SS?

I rolled my 401K over as soon as I retired when I was 53. I started collecting from my IRA about 5 months later. I started collecting SS May of this year at 62.