When Should You Start Taking Distributions from Your 401k?- Season 5: Episode 12

If you’re retired, or you’re approaching retirement, there’s a decent chance that you’ve got some money saved up in what’s known as a “qualified” retirement plan – meaning one that gave you a deduction going in, is tax deferred while it grows, and then will be taxable when the money comes out. In general, we’re talking about a 401k, 403b, or something your company set up that is not a government plan.

Since you’ve been saving that money for retirement, you may have wondered when the best time to take that money out might be. If you need it to fund your daily expenses, then the answer is easy: take it out as you need it. But if you don’t need the money right now, is it a good idea to leave it in the retirement plan until you’re mandated to take some out at age 72, or should you begin taking withdrawals before that time?

It’s all about tax management. Many advisors will take the lazy way out and tell you to always wait until later. But we don’t look at it that way. Find out why you may want to tap into your 401k earlier than the conventional wisdom suggests with advice from “Professor” Rick Plum, CFP®, as he speaks with podcast host Johnny Dean on this week’s episode of Managing Your Financial Future!

Important Information:

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

No client or prospective client should assume that the presentation (or any component thereof) serves as the receipt of, or a substitute for, personalized advice from Lucia Capital Group or from any other investment professional.

Rick Plum is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the name Lucia Capital Group, a separate entity from LPL Financial.

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