Millions of older Americans face a financial puzzle: how to spend their hard-earned retirement savings.
What’s known in the wealth management industry as “decumulation” refers to withdrawing safe amounts of money over two to three decades. The conundrum isn’t about building a fancy beach house or moving to Paris. Instead, it’s about bankrolling general expenses and lifestyle costs over roughly 30 years and averting potentially costly tax bills.
That’s often easier said than done. The variables in the equation include unexpected costs, pricey bucket-list dreams, market volatility, inflation and long-term savings that span the tax spectrum, from 401(k)s to individual retirement accounts to brokerage accounts.
The decumulation puzzle is immediately complicated for the roughly 68 million Boomers, born between 1946 and 1965, whose youngest members will turn 65 by 2030.
Here are five strategies, including one counterintuitive idea for affluent retirees and those soon to leave their careers, about how to spend savings held in 401(k)s, individual retirement plans, brokerage accounts and cash.