Tag: drawdown
Hoarding retirement savings is a risk. At a recent conference, retirement experts concluded that the lack of an easy drawdown mechanism in 401(k) plans was the major challenge facing the 401(k) system. In 2014, the Treasury Department and the IRS issued guidance that made longevity annuities accessible to 401(k) plans and that enabled target dat…
The brief’s key findings are: Retiring baby boomers need a strategy to draw down their 401(k)/IRA balances to avoid either outliving their savings or scrimping on consumption during retirement. Traditional strategies include spending only the income, consuming assets based on life expectancy, and drawing 4 percent of initial assets each year. A comparison found that a new…
