Retirement Distribution Planning in Germantown & Memphis, TN
Saving for retirement is one job. Turning those savings into income that can last is a different one.
Distribution planning is deciding when to draw income, from which accounts and in what order, with taxes and required withdrawals in mind.
What is distribution planning?
For most of your working life you are building savings. In retirement the question changes to how you will use them.
A distribution plan lays out which accounts you draw from and when, so you can see where your income will come from each year.
What a distribution plan looks at
When to claim Social Security
Required minimum distributions, which generally begin at age 73 (age 75 if you were born in 1960 or later)
How each source of income is taxed
Health care and long-term care costs
Inflation over a retirement that may last 20 to 30 years
What you want to leave to family or causes you care about
Why the order matters
Withdrawals from tax-deferred accounts such as traditional IRAs and 401(k)s are generally taxed as ordinary income. Qualified Roth IRA withdrawals generally are not.
Social Security may be partly taxable depending on your other income, so the mix of accounts you draw from can change your tax picture from year to year.
Markets matter too. A downturn early in retirement can affect how long savings last, which is one reason a plan should be reviewed regularly.
How we help
1. A retirement income analysis.
We estimate how much income you will need each month and show how your existing accounts could provide it.
2. A year-by-year view.
We map your income sources so you can see what comes from where, and when.
3. Coordination with your tax professional.
We are not a CPA firm and do not give tax advice, so we work alongside the professional who does.
4. Regular reviews.
We revisit the plan at least once a year and whenever life changes.
Common questions
Will my taxes go down when I retire?
Not necessarily. You still have income, and you may have fewer deductions than you did while working.
What happens if I miss a required minimum distribution?
You could owe an IRS penalty on the amount you should have taken. Talk with a tax professional promptly if you realize you missed one.
I have more than one IRA. Do I take a distribution from each?
The amount is calculated for each IRA, but you can take the total from one IRA or spread it across several. Workplace plans such as 401(k)s follow different rules.
Can I give my required distribution to charity?
If you are 70½ or older and own an IRA, you can send money directly to a qualified charity. It can count toward your required distribution.
Next step
Have a question about your own situation? Book a free retirement review or call our Germantown office at 901-508-2433.
This page is general education, not advice for your situation. AAA Life Solutions is not a CPA firm or a law firm and does not provide tax or legal advice. Please consult a qualified professional about your own circumstances.
Some of the companies we utilize for various client needs include:
Investment advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor and an affiliate of Brookstone Capital Management, LLC. BWA and AAA Life Solutions are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents.
The content of this website is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives.
