Retirement Income And Withdrawal Strategies | Insights Live℠ | Fidelity Investments

About this video

• Video Title: Retirement Income And Withdrawal Strategies | Insights Live℠ | Fidelity Investments
• Channel: Fidelity Investments
• Speakers: Suzie Allen, Rita Assaf, Christine Chase, Christian Jeeves
• Duration: 00:46:55

Overview

This video from Fidelity Investments discusses strategies for generating retirement income and managing withdrawals from various accounts. It covers essential topics such as identifying expenses, understanding income sources, managing tax-advantaged accounts (IRAs, 401(k)s, Roths), claiming Social Security, utilizing annuities, deciding withdrawal order from different account types, dealing with market volatility, and employing tax management and charitable giving strategies. The goal is to help viewers plan for a confident and fulfilling retirement.

Key takeaways

• Expense and Income Mapping: Begin retirement planning by detailing all expenses (essential and discretionary) and identifying all sources of retirement income (Social Security, pensions, annuities, etc.) to determine the portfolio withdrawal amount needed.
• Tax-Advantaged Account Rules: Understand withdrawal rules for traditional IRAs/401(k)s (taxed as ordinary income after 59½, mandatory RMDs at age 73) and Roth IRAs/401(k)s (qualified withdrawals of earnings are tax-free after age 59½ and a 5-year waiting period; no RMDs).
• Social Security Claiming Strategies: Options range from claiming as early as 62 to delaying past full retirement age (FRA) for an 8% annual increase. Spousal benefits also offer additional claiming strategies for couples.
• Annuities as Income Streams: Income annuities can provide a predictable, pension-like income stream to mitigate the risk of outliving savings, especially as traditional pensions become less common.
• Withdrawal Order Matters: Consider drawing from taxable accounts first, then tax-deferred, and finally tax-free Roth accounts. Alternatively, proportional withdrawals can help smooth tax liability and avoid sharp income spikes.
• Market Volatility and Confidence: While market volatility doesn't change account withdrawal rules, it can impact confidence. A well-diversified plan with predictability and growth potential is crucial for maintaining spending confidence.
• Tax Management Strategies: Utilize income smoothing, tax-loss harvesting, Roth conversions (especially in lower-income years), and charitable giving strategies like Qualified Charitable Distributions (QCDs) and donor-advised funds to manage tax liabilities.
• Spending Balance: Finding the right balance between spending too much (risking running out of money) and too little (missing out on enjoying retirement) is key. Predictability through income sources can boost spending confidence.
• Investment Mix: Create a portfolio blending dividend-paying investments, bonds, and growth-oriented assets. The allocation should align with individual goals, risk tolerance, and time horizon.
• Regular Plan Review: Revisit the retirement income plan annually, or more frequently if life circumstances or market conditions change, to ensure its continued effectiveness and efficiency.