You’ve started your retirement savings with your employer’s 401(k) plan, but now you’re wondering what kind of retirement 401(k) withdrawal strategy will help you make the most of your account. Keep reading to learn some retirement withdrawal strategies and how you can maximize your earnings for retirement.
Some retirement plans, such as a 401(k) or Traditional IRA (Individual Retirement Account), are funded with pre-tax dollars, meaning you don’t pay taxes on the money until you make a distribution in retirement.
Other retirement plans, including Roth IRAs, are funded with money you’ve already paid taxes on, so they can grow over time and be withdrawn tax-free.
Each account has rules and restrictions on when you can begin withdrawing money. With a Traditional IRA, you must make distributions annually once you turn 70 ½ or you will receive an IRS penalty. With a Roth IRA, you can leave money in your account indefinitely.
Having a retirement 401(k) withdrawal strategy may help you lower your tax obligations in retirement. Here’s an example withdrawal strategy:
If you expect to be in a higher tax bracket in retirement, you may consider converting your 401(k) into a Roth IRA if you meet the eligibility requirements.
Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA, or taking any action with regard to your 401(k).
Regardless of the retirement 401(k) withdrawal strategy you choose, making a commitment to saving money will help grow your earnings for retirement.
Synchrony Bank offers financial products, including IRA Certificates of Deposit (CDs) and Money Market Accounts, that feature great rates+, minimum deposit requirements and convenient 24/7 online access.
Call 1-844-345-5789 today to learn more about how Synchrony Bank’s products can help you reach your financial goals.
+National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as of 11/01/2016. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of 05/25/2018.
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.