As you move from thinking about building your retirement income strategy and closer toward using it, there are five ways to prepare yourself for this new phase in your life.
1. Review your financial situation
- If you haven’t done so already, create a retirement budget to determine the amount you will need to live on each month in retirement.
- Take a look at your retirement account to see if you have accumulated enough to cover those expenses. If not, there's still time. Contact your financial professional to discuss what you can do to get closer to your goal.
2. Know your options
You have several options for what to do with your retirement account when you retire.
- Roll over into a Traditional IRA
- Purchase an annuity
- Keep assets in the retirement plan
- Take a lump sum
- Begin taking distributions
3. Think about how you will invest
Continue to invest and review your investment mix to make sure it's still appropriate for you. Investments need to be conservative enough to preserve your income during retirement but aggressive enough to stay ahead of inflation and grow your investments over time.
4. Determine your withdrawal strategy
It is important to have a retirement income withdrawal plan because you may be drawing retirement income for decades.
Here are a few things to keep in mind when determining how and when to access your retirement account:
- At age 59½, you can start withdrawing money from your employer-sponsored plan without penalty.
- The SECURE 2.0 Act of 2022 (SECURE 2.0) was signed into law on December 29, 2022, and changed the required beginning age for required minimum distributions from 72 to 73 beginning in 2023. Individuals born after 1951 must take their first RMD by April 1 of the year following the year in which they turn 73 and by December 31 each year thereafter.
- You might want to withdraw from taxable accounts before tax-deferred accounts.
5. Consider your legacy
Pre-retirement is a good time to create an estate plan with your attorney. You'll want to take into account all of your assets (including investments, retirement accounts, insurance policies and real estate) in determining your financial legacy. Log in to your account to take stock of your retirement account and discuss your options with a financial professional.
OneAmerica Financial is the marketing name for the companies of OneAmerica Financial. Non-registered group annuity contracts are issued by American United Life Insurance Company® (AUL), a OneAmerica company, One American Square, Indianapolis, IN 46282, 1-800-249-6269. Group annuity contracts are issued by AUL and registered variable annuity products are distributed by OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRA, SIPC, One American Square, Indianapolis, IN 46282. Not available in all states or may vary by state. Please note that the use of asset allocation or diversification does not assure a profit or guarantee against a loss. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.