While most people consider their investment plan before retirement as one of the most important financial decisions of their lives, many do not consider the implications of managing their 401k after retirement. To properly manager your 401k money after retirement, there are several things you must do.
Determine Your Needs
The first thing you must do to properly manage your 401k money after you retire is determine your needs. After you retire, it is completely possible that you will not have enough money to last throughout your retirement. If this is the case, you need to figure out how much more you need to earn in order to reach that goal. From there, you will need to adjust your investment allocations accordingly.
The next thing you must do to properly manage your 401k money after you retire is monitor the progress of your account. Keep a strong eye on each fund that you are invested in. If one of the funds does not seems to be performing as well as others, you may be better served by adjusting your investment allocations. Furthermore, as you age you may want to alter your allocations so more money is in conservative investments.
The third thing you must do to properly manage your 401k money after you retire is strategically withdraw your funds. This is tricky because you want to ensure that you pay as little tax on the money as possible. The best way to do it is to take out as little as necessary each year. However, after you turn 70 and a half years of age, you will be required to make withdrawals.