F.52 Retirement income and distribution strategies Flashcards

The minimum amount that must be withdrawn annually from tax-deferred retirement accounts (e.g., 401(k), IRA) starting at age 73 (as of 2023).

The risk that poor investment returns early in retirement can significantly impact portfolio longevity, especially when withdrawals are being made.

A general guideline suggesting retirees withdraw 4% of their retirement savings annually to sustain income for 30 years.

A financial product that provides guaranteed periodic payments for a specified period or for life, often used for retirement income.

The risk that a retiree will outlive their retirement savings, requiring strategies to ensure lifelong income.

The process of strategically claiming Social Security benefits to maximize lifetime income, considering factors like delayed retirement credits and spousal benefits.

A retirement income strategy that divides assets into different “buckets” based on time horizon and risk tolerance (e.g., cash for short-term, bonds for medium-term, stocks for long-term).

A method of withdrawing retirement funds in a way that minimizes taxes, often by balancing withdrawals from taxable, tax-deferred, and tax-free accounts.

A strategy in which a retiree selects a single-life pension payout and uses life insurance to provide income for a surviving spouse.

A strategy of converting traditional IRA funds into a Roth IRA gradually over time to reduce taxable distributions in retirement.