Knowing how to withdraw your money from a retirement account is just as important as putting money in.
Once you retire, you can start tapping into those rainy-day funds.
But did you know there are tax traps everywhere meant to eat away at those savings?
Don’t fall victim to the government’s greedy scheming.
I can show you how to safely withdraw your hard-earned money without giving portions of it away.
You work and work for decades so you can finally retire.When that day comes, you’ll probably feel more than ready to start using the hard-earned cash you set aside.
But, as always, there’s some government provision hidden in the fine print to swindle you out of YOUR money.
It starts with choosing a retirement account, years before you’ve planned your first vacation and dreamed of a beach home.
They tell you to choose between a tax-deferred or tax-deductible account.
Like you’re supposed to know the difference.
And once you’ve committed to the one that will make the government the most money, they keep the wool over your eyes for years afterwards.
If you’ve ever tried to dip into your savings early, you know what I’m talking about.
Say an unexpected medical bill comes up. You want to use a little bit from your retirement fund so you can still cover the bills for this month.
That’s fine, but the government is going to take a 10% cut just so you can access your own money.
Called early withdrawal fees, they’re just another spoke in the wheel of how the government controls your retirement savings.
But what can you do about it?
Thanks to the corrupted establishment, the only way to save for retirement is through the self-serving system they’ve created.
There is a way to protect yourself and your money from their greedy hands.
With a few smart strategies, you can make the most out of your dollars once you get to retire.
Withdrawal strategies are the key to escaping the tax traps riddled through your retirement account. Here are 4 ways to establish a strategy right for you:
1. Identify your cash flow.
This just means figure out where your money is coming from.
Before, you most likely relied on regular paychecks from your employer.
While you can count on scheduled checks from Social Security, you should consider where else your income is sourced from.
That way you can figure out where streams of money can go to future investments.
Just because you’ve retired doesn’t mean your money is now stagnant.
Withdraw with a level head to invest in low-risk securities like bonds or put it into a stable certificate of deposit (CD) account.
2. Determine how to withdraw.
You can’t just walk up to an ATM to withdraw cash from your 401(k).
Through a process called sequencing, you can equal out your distributions so that tax rates remain constant.
If you take too much money at once, your tax equilibrium will be too low in the future, and you’ll end up owing more than you should.
While it can be difficult to cut back, limit the amounts you’re withdrawing and keep it consistent.
3. Put the right assets into the right accounts.
Once you’ve decided which kind of taxes you’d like on your account, you have to choose which types of investments belong where.
The answer is to put the least tax-efficient, high return investments in a tax-deductible account and the most tax-efficient in your tax-deferred account.
That way you’re paying the least amount of taxes possible.
4. Make yearly strategy changes.
Things change over time, and it’s important that your money is keeping up.
Every year you should reevaluate your retirement accounts and your withdrawal strategy.
That way, sly new tax reforms can’t swindle you out of cash that’s rightfully yours.
With this system, your retirement fund can stay where it belongs: in your hands.
The government gets enough of your money from other taxes littered throughout your life.
Let retirement be your happy place that can be worry, and tax, free.
