As retirement approaches, start thinking about the options for receiving your money. There are always tax implications, differences between traditional vs. Roth withdrawals, etc. to consider, so it’s a good idea to call your financial professional.

Here are options for the frequency and dollar amount of payments:

  • Systematic Withdrawal: You can receive a fixed dollar amount at the frequency you select (monthly, quarterly, semi-annually or annually) until your account balance reaches zero. You can also choose how long and how frequently you would like to be paid, with payment amounts varying based on the performance of your investments. You can continue to manage and change your investment options while receiving systematic withdrawals.
  • Lump Sum: You receive the entire balance of your account in one payment. Unless the money is rolled over into another qualifying plan within 60 days of receipt, it will be taxed based on your tax bracket.
  • Partial Lump Sum: You can take part of your account balance as a lump sum and leave the remainder in your account. Your money can stay in your account, regardless of your employment status

Required Minimum Distribution (RMD)

This is a required distribution once you reach age 73, or the year you retire, whichever is later. You can delay your first RMD until April 1 of the following year, but this may result in higher tax liability as you will receive two payments in the same year. If you don’t take the RMD you may be subject to additional taxation and/or penalty. Note that Roth accounts don’t have RMD’s during the original accountholder’s lifetime. Learn more about RMDs.

Supplemental payments

This option allows you to withdraw additional funds any time you are receiving installment payments. It’s processed just like your installment payment but will reduce the amount of your future payments.

Resources

Learn about 7 common strategies people use for for withdrawing retirement savings and consider which style might fit you best.

A key step in retirement planning is identifying what your future income will be and where it will come from.

3 potential advantages your retirement plan can help provide for your future income.

Get the help you need

Talk with one of our Account Executives if you have questions about receiving your money in retirement. Neither Nationwide nor its representatives may offer tax or legal advice. You should consult your own counsel before making any decisions about plan withdrawals.

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