How Do I Turn My 401(k) Into A Paycheck?Turn Your 401(k) Into A Paycheck You Can’t Outlive.
A retirement date changes the question from how much you saved to how much arrives each month. Maartin builds that monthly income around what you spend.
The Short Answer
Start with what you spend each month. Maartin maps every account, your Social Security and any pension against that number, then plans which money pays which bills and in what order, with your CPA checking the taxes. Annuity income can cover the essentials for life; its guarantees depend on the insurer’s claims-paying ability, and early withdrawals can carry surrender charges.
Three Rollover Rules Worth Knowing
- 60 Days
- The time you have to deposit a distribution paid to you into another plan or IRA, counted from the day you receive it.
- 20%
- Withheld from a retirement plan distribution paid to you, even if you plan to roll it over. A direct rollover avoids it.
- 1 Per Year
- One IRA-to-IRA rollover is allowed in any 12-month period, counting all your IRAs together. Direct transfers between IRAs aren’t limited.
Source: IRS.gov
Sound Familiar?
The Questions That Come With A Retirement Date.
The closer the date gets, the louder these get. Maartin’s plan answers each one in writing.
- Will It Last As Long As I Do?You know what you saved. What you want now is a monthly income that keeps arriving for life.
- What Do I Do With My 401(k)?Leave it, roll it to an IRA or turn part of it into income. Each choice follows its own IRS rules.
- When Should I Claim Social Security?Claiming age changes your check for life. The decision stays yours, and Maartin shows how each age fits your income plan.
- How Much Will Taxes Take?Different accounts are taxed differently when you withdraw, so the order you draw from changes what you keep.
- What If I Need Care Later?Medicare doesn’t pay for long-term care, so a long stay in care can draw down savings meant for income.
- Will My Spouse Be Covered?If one of you outlives the other, the income plan has to keep working for the survivor.
Working With Maartin
How Your Income Map Gets Built.
- 01
Every Account On One Page
401(k)s, IRAs, pensions, savings and your Social Security estimate, listed together on one page.
- 02
Your Monthly Spending
What it costs to live the way you want, split into essentials and everything else.
- 03
A Dependable Income Floor
Social Security, any pension and, where it fits, annuity income are lined up to cover the essentials first.
- 04
A Reserve For The Years Ahead
Money set aside for later years, larger expenses and surprises, kept apart from the income floor.
- 05
A Rollover Checklist
If a rollover is part of the plan, you get the steps in order, including how a direct rollover avoids the 20% withholding.
Annuity guarantees depend on the issuing insurer’s claims-paying ability, and withdrawals during the surrender period can carry surrender charges.
The Ages That Shape Your Income
Six Ages Worth Planning Around.
Each of these birthdays changes a rule about your money. Your income map lines them up in order.
- Age 59½Early-Withdrawal Tax Ends
- Age 62Earliest Social Security
- Age 65Medicare Eligibility
- Age 67Full Retirement Age
- Age 70Delayed Credits Stop
- Age 73Withdrawals Required
Full Retirement Age Is 67
For anyone who reaches 62 after 2021, full retirement age is 67. Waiting past it raises your monthly benefit for each month you delay, up to age 70. See how timing fits your plan.
Required Withdrawals Start At 73
The IRS generally requires withdrawals from traditional IRAs and retirement plan accounts once you reach 73. Maartin and your CPA plan for them before they arrive. How the rules work.
Services That Connect
Services For Your Retirement Income.
Retirement Income Planning
The written plan behind your monthly income: what you need, where it comes from and how long it lasts.
Read More401(k) And IRA Rollovers
Leave it, roll it to an IRA or turn part of it into income: your options side by side.
Read MoreSocial Security Timing
How claiming age fits your retirement income plan, using the Social Security Administration’s own rules.
Read MoreAnnuities
How fixed and fixed indexed annuities work, including surrender periods and the insurer’s claims-paying ability behind every guarantee.
Read MoreQuestions
Common Questions
How much monthly income will my savings provide?
That depends on what you have, what you spend and when you claim Social Security. Maartin builds your income map from your own statements, so the number reflects your accounts and your spending rather than a rule of thumb.
Should I roll my 401(k) into an IRA when I retire?
That depends on what you want the money to do. You can leave it with the plan, roll it to an IRA or use part of it for income. Maartin compares the options as insurance and annuity planning, and a direct rollover avoids the 20% withholding on a distribution paid to you.
Is an annuity right for my retirement income?
An annuity can turn part of your savings into income for life, which some people use to cover their essential bills. Its guarantees depend on the issuing insurer’s claims-paying ability, and withdrawals during the surrender period can carry charges. Maartin shows where one would fit in your plan and where it would not.
When can I take money from my IRA without the extra 10% tax?
Generally at age 59½. Withdrawals before then carry an additional 10% early withdrawal tax unless an exception applies. Your CPA can confirm whether one applies to you.
What should I bring to a retirement income review?
Bring recent statements for every 401(k), IRA and savings account, any pension estimate, your Social Security statement and a rough monthly budget. Your latest tax return helps Maartin and your CPA see where taxes land today.
Sources
- 60 days to roll over a distribution paid to you
- Age 59½ and the additional 10% early withdrawal tax
- Earliest Social Security retirement benefit at 62
- Delayed retirement increases count months after full retirement age and before age 70
- Medicare eligibility at 65
- Required minimum distributions start at 73
- Medicare doesn't pay for long-term care
Retiring Soon?
Income You Can
Count On.
Bring your statements, and leave with a monthly income map and a rollover checklist.
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