How Money Gets Paid to You When You Retire

December 11, 2017 Retirement Education

You worked hard for decades to get to your retirement day. The day you are officially income independent. So where’s your check? Well, don’t hold your breath. Your 401(k) may continue to rise and fall with the market, but unless you take some action, you won’t receive any money from it.

There are a few different ways to get a payout from your 401(k). Here are the most common:

  1. Your 401(k) should offer you withdrawal options. But if you don’t like the withdrawal options from your 401(k) provider, you can take an alternate route.
  2. You can roll over your 401(k) into an individual retirement account (IRA) of your liking. And since a rollover isn’t a withdrawal, it generally isn’t a taxable event.

Once you’ve determined where your 401(k) will be housed, you have four options to determine when you will make withdrawals.

  1. Systemic withdrawals
  2. Random withdrawals
  3. Living off the interest and dividend
  4. Purchase annuities

If you prepare for retirement diligently, there can be a great sigh of relief that happens on the day you retire. But unfortunately, this isn’t the end. Don’t exhale too quickly. You have a lot of money you still need to manage and make smart decisions with. How you manage your funds will determine how the course of your retirement goes. Read Pete the Planner’s guide, How Money Gets Paid to You When You Retire to learn more about your withdrawal options.

Additional Resources

NOTES: For answers to specific questions, consult a qualified tax advisor, attorney, or financial professional.

Withdrawals may carry a 10% tax penalty if done before the age of 59 1/2.

Dividends are not guaranteed, actual results may vary.

Prior to rolling over any plan assets, carefully consider various factors such as, investment options, fees and expenses, services, penalty-free withdrawals, protection from creditors and legal judgments, required minimum distributions, and employer stocks depending on individual needs and circumstances.

The views and opinions expressed by Peter Dunn (aka Pete the Planner) are solely his and do not necessarily reflect the views and opinions of the companies of OneAmerica. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice. Pete the Planner is not an affiliate of any OneAmerica company.


Things to Consider Before Taking a Loan
What’s the Right Asset Allocation?
Factors to consider regarding tax deferral