Conventional Wisdom Can Cost A Retiree Money
From: fa-mag.com
Conventional wisdom in any area of life is far from infallible, and this is as true in retirement planning as it is in politics.
If you go by the standard recommendation for withdrawing money from various savings accounts and for taking Social Security benefits, a retiree could end up running out of savings in retirement.
William Meyer and Dr. William Reichenstein, experts in retirement planning and Social Security strategies, say they have developed new ways to calculate withdrawal strategies that will make retirement money last longer.
This is particularly important today as people are living longer and many retirees say they are afraid of running out of funds before they run out of life.
Conventional wisdom says a retiree should withdraw money from taxable accounts first, then from tax-deferred accounts such as 401(k)s and traditional IRAs, and then from tax exempt accounts such as qualified withdrawals from a Roth IRA. At the same time, starting Social Security benefits should be delayed as long as possible so the monthly benefit amount grows to its maximum when the recipient turns 70.
