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Asked 10/12/2007
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Once somebody retires, how do they start getting monthly income from their retirement plan?(401k, ira, etc.)? Who do they consult, when will they start getting the money, is it all a lump sum or monthly installments? Answers of that nature |
Answer 1/2 - Submitted 10/13/2007
It depends how you want to take it out and at what age. For most tax sheltered plans, you must wait until age 59 1/2 or else you get penalized. It is most wise to leave the bulk of the plan in place and only draw off of it the income you need to live on. That way the principal keeps compounding. You can take it out in a lump sum but wouldn't want to unless you want to roll it into a better investments.
The short answer is that you can draw from it however you would like to, it's your money!
Hope this helps!
Answer 2/2 - Submitted 10/16/2007
by moving it to an IRA and setting up installment payments based upon your life expectancy. Don't do this inside your 401k. They generally are not geared to doing this and will likely screw it up.
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