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When it comes to retirement planning, there are many factors to consider before deciding whether to pull from a 401k or take Social Security early. Both options have their own pros and cons, and it’s important to weigh them carefully to make the best decision for your financial future.
One key consideration is the impact on your retirement savings. Withdrawing from your 401k early can significantly reduce the amount of money you have saved for retirement, as it will not only deplete your savings but also incur penalties and taxes. On the other hand, taking Social Security early means receiving reduced benefits for the rest of your life, which can also impact your overall financial security in the long run.
Another factor to consider is your current financial situation and needs. If you are in need of immediate cash flow, pulling from your 401k may be a more attractive option. However, if you can afford to wait and delay taking Social Security, you may receive higher benefits in the future.
It’s also important to consider your health and life expectancy. If you expect to live a long and healthy life, delaying Social Security may be beneficial as you can receive higher benefits in the future. On the other hand, if you have health issues or expect to have a shorter lifespan, taking Social Security early may be a better option to maximize your benefits.
Additionally, it’s worth considering the impact on your tax situation. Withdrawing from your 401k may result in a higher tax bill, while taking Social Security early may have tax implications as well. It’s important to consult with a financial advisor or tax professional to understand the tax implications of each option.
In conclusion, the decision to pull from your 401k or take Social Security early should be carefully considered based on your individual financial situation, needs, and goals. It’s important to weigh the pros and cons of each option and seek professional advice to make the best decision for your retirement planning. Ultimately, the best choice will depend on your unique circumstances and long-term financial goals.
I don't really care what you say, what you have on your face, or what dogs are barking in the background, but lip smacking mouth noises are a dealbreaker. If I come across the second video with that noise in it, I'm gonna have to stop watching altogether.
Take the money and run with it. Waiting is a fools bet.
Great advice.
I am 67 and will be retiring in June 2024.
Our plan is to delay my SS until 70 and my wife will take hers at Full Retirement age.
So for 2 years we will be taking 6% from our investment.
Then at 70 we will live off of SS talk and my side job earning $20,000 per year, allowing our savings to grow.
At 75 (when I will stop my side $20,000 per year job) we will be taking under 2% from our saving.
But as you said if the market makes a big drop early we will switch the plan to taking SS before 70.
You go why to much the other way. Just too goofy for me
I started SS at 64 and 9 months with $650K in cash, precious metals and investments and a net income of about $700 a month from a rent-to-own that will close out in a couple more years. My monthly benefit is just under $3K in 2023 and will be just over $3K in 2024. About 9% is in a ROTH in a couple of dividend stocks but mostly in CDs, 9% in precious metals, 40% in IRA CDs and a few dividend stocks, 42% after tax cash mostly in CDs earning 4+%. I'm currently earning about $16K a year in interest. My SS benefit is $36K (rounded). Like Doug I want to gross $50K a year. $16K+$36K=$52K. I don't trust the stock market and I see a major correction coming when the recession "officially" begins. I have zero debt, a roof over my head and more stuff than I know what to do with. If I had to I could easily live on my SS benefits alone. I have other small sources of income that amount to about $18K a year. I have mostly eliminated the unknown of the markets and have currency deflation insurance via PMs. What I don't know for certain is what tax rates will be after 2025, what inflation will be or how long I'm going to live. As of this year because I worked until July 17th I'll be adding about $30K to my savings / investments. My biggest concern is getting my deferred money out in the most tax efficient manner. I will take out whatever I can that doesn't bump me into the next tax bracket every year from next year (maybe this year) forward. I'm sure there are ways I could have done better but I think I will be OK. I don't need $50K a year gross but that's what I am going to allow myself because why else did I work the majority of my life?
everyone is in a different scenario. Do a simple spreadsheet to figure it out. Yes, it takes a little time but I found out it was WELL worth the time to set it up. I retired at 61.. have no job for income.. just doing what I can to live frugally off my income from investments. 2022 was a shit show for my 401k. I set up my spreadsheet to take SS at 70… and figured out when all my money would run out based on my budget, and taxes. It was my age of 92. I reran the same spreadsheet assuming I take SS at 63, and my money lasted until I was 95. Now, I may not be alive at 95, or 92.. but seeing that there was a favorable results taking it at 63 for MOST of the years of my life.. I felt it was the right financial decision to take it at 63. My assumptions were 5% growth.. 2.5% inflation. 1% COLA. As growth or COLA go up, the results favor age 63 even more.. Lowering growth did impact it toward benefiting age 70.. Anyway, long post.. but do your own spreadsheet based on your own financial situation. Not everyone is average, and you might be surprised the impact your decision may have.
In a up market withdrawals are partly financed by the market
Good point ..don't take Social Security in a up or sideways market …take if market drop of 20% or more
Did not expect the old school punk reference. Josh contains multitudes 😉 <3
Get to the point, dude.
This is why qualified dividends are so important. He can easily get that 14K in dividends and not care what the market does. Its very simple really.
Hey Doug do a video where the wife is 2.5 years older, on when to take social security. That is my situation right now. wife is 62.8 and I am 60. Wife at 67 will have 3,200 and I will have 3,000 in SS. We don't need SS as we have more than enough coming from qualified dividends to cover all expenses, plus extensive fun (travel primarily). I was running numbers to see if it was smart to delay for the both of us taking SS until 70.5 and convert the our entire 401K to Roth (combine 401K accounts is 1.7 million). Something I need to keep looking at.
Wastes too much time BS’ing, and then, fails to address critical questions about alternate scenarios.
I'll be retiring at 65 and 3 months, which leaves me with a year and 7 months to FRA with Social Security. I don't consider the money from my 401k to cover a year and 7 months as significant. I should mention that I'm retiring with 2 pensions. And an annuity.
it would depend on how much your increase would be according to how much you earned and years of that amount.
One of the key things about taking SS early is you are saying my investment "WILL" perform or I could be doomed as my portfolio must sustain half of my expenses ….versus taking later is saying my investments have performed and I will spend down my assets and wait and not have to depend on the performance of my portfolio providing half of my income, it only has to provide 30% of my income if I wait until age 70.
the scenario is close to me also but what about going all the way to age 70 (just turned 64)? would you recommend taking SS now or waiting till 66 and 8 months and the difference is 650 bucks or wait till 70 with a difference of 1571 bucks. I have 1 million in my 401. thx and unlike Doug I watch your videos every day. Just kidding. thx Josh
My plan is to take a lump sum payment and close out my 401k one year before my retirement, pay the taxes on it then stash it away and draw my social security check.
Get to the point !!!!!
Hmm – pulling from 401k/IRA in a declining market to postpone taking social security???
Why would you assume he is getting $3000 social security? You would need a very high income to get that much. Average SS payment is about $1250 according to other sources.
You're a waste of time with your side comments.
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