[USER]

I’m a 56 yr old semi-retiree with a 401k savings of around $700k. I haven’t started drawing off of it yet but because it’s before tax savings, it’ll be taxed at 20% upon withdrawal.

How can I enjoy spending some of this dough without depleting it too quickly? It would be great if I could take a monthly payment while it also continues grow in value.

[Susan]

It’s not taxed at 20%. They take a 20% withholding, but then when you do your taxes depending on your other income, you may get some back, or you may owe more.

[Tim]

Do you need the money now or can you wait 3 years?

[Eric]

Not a complete set of info on your particular situation (health, disability, expenses, budget, single / married, etc…?) Are you still working? company or have a side job/career? If laid off after 55 you can start early withdrawal with no penalty at 55 from 401k (rule of 55) however if you expect you’ll live a typical long life 79m/83w (average not max!!) or possibly even till your 90’s, then you really should keep working if at all possible.

If not, try to keep under 2 % withdrawal for as long as possible.

Another topic: 457 mandatory government job, not invested, can’t move to 401k?

[Andrea]

Use a 4% withdrawal rate. At 700k you can withdraw just over 2k per month. The 4% rule is typically what people use.

[Author]

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