This week on Money Mondays with Steve Laraway from Laraway Financial Steve and I talked about how to withdraw form your retirement account.  Steve went into details and strategies to help you determine was would work best for you.

How to Withdraw from Your Retirement Account

A Withdrawal Policy Statement (WPS)

  1. Determine your income goals that withdrawals must meet;
    1. Should be in a good financial plan
    2. Update periodically
  1.  Determine what assets you need to fund your goals;
    1. If you don’t have enough assets, then adjust your payout.
  1. Select your initial withdrawal rate;
    1. Big discussion over this – what it should be.
  1. Determine the method for determining the source of each year’s withdrawal income from the portfolio;
    1. Raise cash or sell assets
  1. Determine the method for determining the withdrawal amount in subsequent years, including both the trigger points for adjustments (other than an inflation-based increase) and the size of the adjustment.
    1. Increase by inflation?
    2. Drop in portfolio value?
    3. Growth in portfolio.
    4. Etc.