Approaching retirement
Getting ready to retire
You may be able to toss the alarm clock when you retire, but you need to be alert to changes to retirement account rules, benefits and financial plans.
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Know how the SECURE Act has changed retirement
Revisit Required Minimum Distributions (RMDs)
Review your financial plan regularly
Rules for required retirement account withdrawals changed with the SECURE Act: If you turned 70 ½ in 2020 or later, you can wait to make these Required Minimum Distributions until you turn 72.
The rules for RMDS changed in 2020 and again in 2021. There may also be changes for 2022, so when considering the next few years, be sure to ask your financial advisor about when you may need to make required withdrawals.
As a guideline for how much to plan on spending: Start with the 4% rule, which says to use 4% of your retirement savings during your first year of retirement. After year 1, continue to modify this amount to address inflation.
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Know your government benefits
Take (or leave) your Roth IRA
Create an estate plan
Waiting to reach what the government calls “full retirement age" for Social Security benefits as opposed to taking them when you’re eligible could provide some financial oomph. Also important: You may have to pay federal and state taxes on these benefits.
Roth IRAs are retirement accounts that have different rules than some other retirement accounts, including freedom from Required Minimum Distributions. You never have to withdraw your funds.
An estate plan gives you control over how you want material, personal and financial matters handled and can include things like assigning powers of attorney, advanced medical directives, and who gets stuck with the ugly (but much loved) couch.
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs® but may not reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.
1
Know how the SECURE Act has changed retirement
Rules for required retirement account withdrawals changed with the SECURE Act: If you turned 70 ½ in 2020 or later, you can wait to make these Required Minimum Distributions until you turn 72.
2
Revisit Required Minimum Distributions (RMDs)
The rules for RMDS changed in 2020 – just for 2020 – when Congress passed the CARES Act. When considering 2021, be sure to ask your financial advisor about when you may need to make required withdrawals.
3
Review your financial plan regularly
As a guideline for how much to plan on spending: Start with the 4% rule, which says to use 4% of your retirement savings during your first year of retirement. After year 1, continue to modify this amount to address inflation.
4
Know your government benefits
Waiting to reach what the government calls “full retirement age” for Social Security benefits as opposed to taking them when you’re eligible could provide some financial oomph. Also important: You may have to pay federal and state taxes on these benefits.
5
Take (or leave) your Roth IRA
Roth IRAs are retirement accounts that have different rules than some other retirement accounts, including freedom from Required Minimum Distributions. You never have to withdraw your funds.
6
Create an estate plan
An estate plan gives you control over how you want material, personal and financial matters handled and can include things like assigning powers of attorney, advanced medical directives, and who gets stuck with the ugly (but much loved) couch.
of Americans taught themselves about personal finance.
The Consumer Sentiment Survey was conducted by Marcus by Goldman Sachs in March 2021 among 1,501 Americans. Savings accounts defined as savings accounts, certificates of deposit (CDs) and money market accounts.
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