At retirement, your workplace plan changes from an account you put money in to, to one you take money out of. Here’s a look at some of the most popular strategies for accessing your savings in retirement.

This information is simply meant to help get the gears turning regarding this important retirement planning decision. When it’s time to make a move, you’ll want to carefully review your options, use the resources your employer provides, and seek guidance from a financial or tax professional.  

Systematic withdrawals are one way to get the money flowing

Many plans will let you set up ongoing withdrawals, either in a certain dollar amount or as a percentage of your overall balance.¹ The withdrawals are taken proportionately from all the plan investments you own, which helps maintain your investment mix as you spend down your account.

An immediate annuity can provide regular payments

Issued by insurance companies, immediate annuities are contracts that, in exchange for an up-front payment, provide a certain amount of monthly income for an agreed-on amount of time. Some can provide payments for life.

While this option may be a great solution for some, there are some potential downsides to owning an annuity. For instance, you’ll no longer have access to your original savings, or principal. Fees may be high. There may be sales commissions and surrender charges. And the actual rate you earn on your money can be considerably lower than you might earn in a mutual fund.

A customized asset allocation and withdrawal plan can be built around your needs

If you’re highly knowledgeable about retirement income planning—or work with someone who is—a personalized strategy may be a good option for you.

A customized retirement income strategy allows you and your financial professional to potentially pursue continued growth, deal with risk, and—above all—seek to generate the income you need in a way that works for you. 

For instance, with a bucket strategy, you invest money that you’ll need sooner in less risky vehicles, such as money market and bond funds, and cash that you’ll need later in growth-oriented investments, such as stock funds.

And with account sequencing, you time your withdrawals from your various tax-deferred and tax-free (Roth) accounts with the goal of minimizing the taxes you pay in retirement.²

Get more details on customized drawdown strategies.

Consolidating your investments can help

Imagine having to fill your gas tank from several different pumps at once. That’s what it can be like to try to plan your retirement income when your investments are scattered across multiple accounts.

If you have several accounts (as many people approaching retirement do), check into the possibility of consolidating money in your workplace retirement plan, an IRA, or both. With a more complete picture of your retirement assets, planning for retirement income can be far simpler, and you could end up paying fewer fees.

As other options are available, such as leaving it in your old plan, rolling over to an IRA, or cashing out, you're encouraged to review all your options to determine if combining your retirement accounts is suitable for you.

Your retirement income is important—take the time to plan it carefully

Decades of hard work and saving got you to the point where you can create some retirement cash flow for yourself. You can make sure your sacrifice pays off by learning about your options and planning for retirement plan withdrawals before you retire.  

1 "How to use a systematic withdrawal plan for retirement," thebalance.com, 4/30/22. 2 "9 Retirement Distribution Strategies That Will Make Your Money Last," money.usnews.com, 2/3/22.