- When you retire, one benefit you receive is Social Security. Social Security benefits vary depending on how old you are when you retire and when you were born. The youngest age at which you can retire and still receive Social Security benefits is 62. If you retire at this age, you will only receive a partial benefit. If you wait until the full retirement age of 67, you get the biggest benefit possible.
- Regardless of the type of retirement account, you can typically take regular distributions. For example, if you have a 401(k), you can take a specific amount of money every month. You can do the same with an Individual Retirement Account. If you do not want a regular payment, you can also elect to take a lump sum distribution from your account. If you have a regular IRA or a 401(k), be careful about taking too much at once because that can put you in a different tax bracket.
- Another option for retirees is to buy an annuity with their retirement savings. For example, buying an annuity may be an option with your 401(k) plan. When you buy an annuity, you take a lump sum from your retirement account and purchase a contract from an insurance company. This provides you with a specific monthly payment each month until you die or for a certain number of years.
- Depending on how old you are when you retire, you might have to start taking minimum distributions. For example, if you retire and reach age 70 1/2, you must start taking minimum distributions. If you have an IRA or you own more than five percent of a company in which you have a 401(k), you have to start taking minimum distributions at this age, regardless of whether you are retired or not.
Social Security Benefits
Regular Distributions
Annuity
Required Minimum Distributions
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