Knowing how much you are able to spend during your retirement years can be just as intimidating as figuring how much to save for retirement. If you spend too much, you will run out of money sooner. If you spend too little, you may not be fully enjoying your final years to their full potential. We’re here to help ease this worry and to give you an idea of how much will likely be an appropriate withdrawal rate.

Whether you have a 401(k) or a pension with Lockheed Martin, one thing is certain; you will be withdrawing regularly during retirement to meet living expenses and your financial goals. To come up with a rough estimate of a safe withdrawal amount, add up the values of all your investments right before you retire. Then multiply the total by 4% and this will be the annual amount you can distribute from your portfolio. This number can be adjusted annually for inflation. Example:

  1. Add all investments: $50,000 IRA + $25,000 brokerage account + $1,000,000 401(k) = $1,075,000 total
  2. Total investments divided by 4%: $1,075,000 X 0.04 = $43,000 annual withdrawal (year one)
  3. Adjust for inflation for next year: $43,000 X 1.03 = $44,290 annual withdrawal (year two)

 

This is a quick and easy method called the 4% rule and isn’t a one-size-fits-all answer, but does provide a usual estimate. Each person’s financial needs, risk tolerance, and preferences are different and therefore an annual withdrawal of more or less than this rule may be more appropriate. To get a more accurate estimate of your retirement picture, book an appointment with our Lockheed Retirement Specialists!

For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Martin Retirement Specialist², you can click here to schedule an appointmentclick here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.

Be sure and check back next week for more incredibly valuable information. Cheers!

Disclosures*

Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.

Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.

Our Complementary consultation and free report are for informational purposes only and provided free without any obligation to utilize or retain our investment advisory services.

SMWG, LLC is not affiliated with or endorsed by Lockheed Martin Corporation. Our expertise comes from working with LMT employees for several years and helping them to retire with confidence.

Investing involves the risk of loss, including loss of principal. Past performance does not guarantee future results. Investment products are not FDIC insured, have no bank guarantee, and may gain or lose value. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable for a client’s investment portfolio.

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