How Do You Take Withdrawals During Retirement?

Choosing the accounts you use first to meet your income needs is an important decision. The decisions you make over the course of your retirement can help minimize taxes and avoid penalties on withdrawals, helping to maximize the amount of money that's available to support you for the rest of your life.

Taking Income from Investments

When liquidating investments, whether in annuities, tax-deferred accounts such as IRAs or 401(k) plans, or taxable accounts, your asset allocation and the suitability of your investments need to be weighed against tax considerations. It is also important to set a withdrawal rate that does not deplete your assets too quickly.

Age-Based Rules for Withdrawals

If you're aged 70½ or older, your qualified retirement accounts (like traditional IRAs and 401(k)s) are subject to IRS-mandated minimum required distributions (MRD).

Learn about Taking Required Withdrawals After Age 70½.

If you're under age 59½, a 10% penalty could apply if you take withdrawals from your tax-deferred retirement savings. However, establishing a plan to take Substantially Equal Periodic Payments (SEPPs) can exempt you from the early withdrawal penalty. SEPPs are regular periodic distributions that you take for five years or until you turn age 59½ - whichever is later. Consult with your tax advisor to learn more about SEPPs.

Use the Substantially Equal Periodic Payment Calculator to determine what your payments could be.

Services to Help You Manage Your Income

Fidelity offers services like automated withdrawals to make managing your withdrawals easier.

Learn how to set up regular withdrawals from your Fidelity account.

PDFs require Adobe® Reader®.

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	Choosing the accounts you use first to meet your income needs is an important decision. The decisions you make over the course of your retirement can help minimize taxes and avoid penalties on withdrawals, helping to maximize the amount of money that's available to support you for the rest of your life. Taking Income from Investments When liquidating investments, whether in annuities, tax-deferred accounts such as IRAs or 401(k) plans, or taxable accounts, your asset allocation and the suitability of your investments need to be weighed against tax considerations. It is also important to set a withdrawal rate that does not deplete your assets too quickly. Age-Based Rules for Withdrawals If you're aged 70½ or older, your qualified retirement accounts (like traditional IRAs and 401(k)s) are subject to IRS-mandated minimum required distributions (MRD). Learn about Taking Required Withdrawals After Age 70½. If you're under age 59½, a 10% penalty could apply if you take withdrawals from your tax-deferred retirement savings. However, establishing a plan to take Substantially Equal Periodic Payments (SEPPs) can exempt you from the early withdrawal penalty. SEPPs are regular periodic distributions that you take for five years or until you turn age 59½ - whichever is later. Consult with your tax advisor to learn more about SEPPs. Use the Substantially Equal Periodic Payment Calculator to determine what your payments could be. Services to Help You Manage Your Income Fidelity offers services like automated withdrawals to make managing your withdrawals easier. Learn how to set up regular withdrawals from your Fidelity account. PDFs require Adobe® Reader®.	Role of taxes in determining how to withdraw money from retirement savings Importance of a spending reserve for your withdrawals Set a withdrawal strategy to help make your money last in retirement. Ready to set up minimum required distributions from your IRAs? Enroll using the Automatic Withdrawals tool. Consider whether you should tap into your home equity.
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