Strategic Planning

Your employer may provide lots of advanced notice about the details of arranging retirement income, but it's your responsibility to meet the deadlines. It's often a good idea to plan ahead and to get professional advice.

Before you start withdrawing from your 401(k), you need a plan for how much money to take and when to take it to be sure that you’re:

• Providing enough income to meet your needs
• Continuing to take advantage of tax deferral
• Meeting the required minimum after 70½

You don’t want to be forced to make decisions in a hurry, since once you’ve done certain things—such as a lump sum withdrawal—you can’t change your mind.

Start by finding out from your plan administrator what your distribution choices will be, since not all plans offer all the possible alternatives. Figure out the date you’ll want to start receiving retirement income and find out how much advance notice the administrator needs to meet that deadline.

Your account has to be valued to determine how much it is worth. Every plan values each employee’s account on a regular schedule. But no plan does a separate valuation for account holders who want to move their money or begin distributions. You have to wait until the next regular valuation. In addition, 401(k) plans may hold your money for up to 60 days after valuing your assets. A plan doesn’t have to wait the maximum amount of time, but it can and sometimes does.