If you’re worried about outliving your retirement savings, consider this: Don’t withdraw more than 6 percent annually from your employer-sponsored 401(k) or 403(b) plan. Take more than that and you could be tempting fate. That’s the harsh conclusion from the Institutional Retirement Income Council, a nonprofit think tank that looked at several strategies for new retirees.
Determining how much retirees should withdraw from their retirement plans has been a favorite subject of debate among retirement planners. The council’s 6 percent figure is at least more palatable than the frugal 4 percent withdrawal rate that’s often recommended to keep retirees from going broke.
â— Using all or part of the lump sum retirement savings to purchase an annuity.
â— Purchasing a guaranteed minimum withdrawal benefit, which allows a retiree to maintain some control of the retirement funds but also provides a guaranteed benefit.
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