3. Don’t Withdraw From IRAs and Retirement Accounts Until Age 70 ½
For some people this makes sense, but for others, it is downright foolish. When you look at your retirement income as a whole, you think of all your assets and sources of income as puzzle pieces.
Then, like putting together a puzzle, you put them together to create a picture. When you look at it this way, sometimes you get a better picture (as in more lifetime income) by withdrawing from retirement accounts earlier – not later.
Again, the way to decide on the best time to withdrawal funds is to have a retirement plan that takes into account all sources of income.
4. Live Off the Interest and Dividends
Interest rates are not dependable and companies can cut dividends. Your financial assets are there to be used to create a comfortable lifestyle for you. When you stress-test your plan against various return, inflation and spending scenarios, you’ll often see that it is perfectly okay to spend principal at times.
It would be nice to only live off interest and dividends but that might not be possible depending on your balances. It’s a great goal but don’t make a plan that revolves around the idea.