How to Withdraw from Your Retirement Portfolio

If you are nearing retirement and still working you may want to consider allocating your funds to a decumulation strategy right now. That’s because you never know what tomorrow may bring.

It’s not just retirees and pre-retirees that need to focus on decumulation. No one knows if or when they’ll lose their jobs or become ill and need to tap into their retirement funds.

A decumulation strategy differs greatly from an accumulation strategy as it takes into account how to invest in order provide income at whatever point you may need it.

A comprehensive decumulation strategy may involve buying annuities, inflation protected bonds, and alternative income investments that are not likely to be found in your 401k plan.

You may also want to consider what is known as an in-service rollover. The process of an in-service allows those over age 59 1/2 and still working the opportunity to roll their 401(k) funds into an IRA, without paying penalties or taxes, when done correctly. Once in a self-directed IRA, you are free to choose from a number of investment options.

Make sure you consult with a qualified financial planner to make sure you understand exactly how the process works.