I’m 52 and retired with $1.9m but can’t use most of my money – expert gave an ‘investment’ trick to stretch my savings | 0UD70JL | 2024-05-09 17:08:01
I'm 52 and retired with $1.9m but can't use most of my money – expert gave an 'investment' trick to stretch my savings | 0UD70JL | 2024-05-09 17:08:01
RETIRING early is a dream for many Americans, but some who manage to do it struggle to stretch their cash.
A certified retirement counselor and YouTuber shared his advice for a 52-year-old retiree who stopped working at 50.
The challenge, according to Drew Blackston, was to make his money last at least until age 59 and a half.
That's the age when most people can start withdrawing from retirement accounts without a penalty.
"All the laws and the caution tape fall off of your IRAs, your 401ks, and all your qualified retirement investment accounts," he said.
But without work, the 52 year old, who had a healthy nest egg of $1.9 million, would need to find a way to use those savings to pay for living expenses.
Blackston worked out a strategy to help the retiree make the most of his money.
WAIT FOR IT
Blackston suggested using rule 72T — an IRS rule that allows some restricted withdrawals from an individual retirement account without any additional penalties.
For most, rule 72(t) is a "last resort," according to Investopedia.
But using the rule on just some of his assets would allow the retiree to use it to pay for everyday expenses.
On top of that, Blackston recommended putting some of the savings in a non-qualified taxable brokerage account.
This account would help cover costs.
<!-- End of Brightcove Player --> These withdrawals would be taxable as income.
These strategies are not often used for older retirees, and can be risky.
"If these were his only two accounts, this strategy would be very, very fishy," Blackston said.
But using these two accounts together while his other investments continue to grow would help the retiree make it to 59.5, at which point he could use the rest of his savings without penalty.
RETIREMENT TROUBLE
Financial advisors can be a source of wisdom for those looking to retire.
Blackston recently shared his advice for a 67-year-old with $380,000 saved.
Luckily, her pension helped out.
</div> </div> A 60-year-old woman recently called the financial podcast The Ramsey Show to lament her lack of savings.
With nothing saved, finance guru Dave Ramsey suggested she start putting money away.
Blackston recently shared his $25 savings tip with the U.S. Sun.
A 66-year-old sought Blackston's advice for saving after a divorce.
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