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In Retirement

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In retirement
You've worked hard toward a comfortable and meaningful retirement. These guidelines were designed to help you make your retirement income last.

Your action plan

Know how you'll generate retirement income

With Americans living healthier, longer lives, many retirees choose to work part-time. The benefits of this additional income for even a few years can make a difference in stretching your funds. To help make savings last, take a strategic approach to drawing income from your nest egg and look for ways to minimize taxes.

Read: 4 ways to help boost your retirement income

Go in-depth: Develop an income strategy

View: Maximize your Retirement Income Infographic

Determine your retirement budget

Nobody ever said sticking to a budget is easy, but once you're in retirement, it's never been more important. You could live 20 to 30 years in retirement, so it's important to keep a close eye on your spending. Be especially mindful of medical expenses, which can really add up once you need to pay for Medicare supplemental insurance out of your own pocket.

Learn more: Managing cash flow in retirement

View Infographic: Retirement: What will it really cost?

Start planning: Managing health care costs

Take action: Create a budget

Decide when you'll take your Social Security benefit

Social Security will provide only a portion of your retirement income, but it is certainly an important part of your overall strategy. The longer you wait, the more you'll get, so carefully consider when it's best to take your benefit.

Read: When should you begin drawing Social Security?

Go in-depth: Create your strategy

Understand required minimum distributions (RMDs)

Once you reach age 72, the IRS requires you to withdraw a minimum amount each year from certain IRAs.Footnote 1 The IRS can impose a 50% additional federal tax for missed or insufficient RMDs, so it pays to do a little research to help make sure you get your RMDs right.

Learn more: Required minimum distributions

Consider rolling over old 401(k)s

Consolidating your retirement assets into one easy-to-manage account is simple.Footnote 2 Consider all of your choices

Go in-depth: How much do you really need to save for retirement?

Roth IRA conversion

Find out if it might be worth converting your Traditional IRA to a Roth IRA.

Our Perspectives

Get insights from Merrill to help you plan and invest for retirement.

Consolidating accounts

It's easier to manage your assets when they're in one place. Consider consolidating your retirement accounts.2
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An investment advisory program that combines the best features of online investing with a professionally managed portfolio.Footnote 1
Under the CARES Act, all 2020 RMDs have been waived.

Due to the CARES Act, in certain situations, you can take a distribution from your IRA or retirement plan and repay it later on if you are affected by the coronavirus.

Learn more about the CARES Act implications for retirement plans and accounts.
If you were age 70½ or older as of 12/31/2019, you would be required to take a required minimum distribution ("RMD") from your traditional IRA and certain other qualified retirement plans for 2019. Effective 1/1/2020, in accordance with new legislation, the required beginning date for RMDs for individuals who turn age 70½ on or after 1/1/20 is age 72. You may defer your first RMD until April 1 in the year after you turn age 70½ or 72, as applicable, but then you'd be required to take two distributions in that year. Note that coronavirus legislation eliminated RMDs for 2020, including RMDs to beneficiaries of Roth IRAs.
You have choices about what to do with your employer-sponsored retirement plan accounts. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment, and different types of protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information on rolling over your IRA, 401(k), 403(b) or SEP IRA, visit our rollover page or call a Merrill rollover specialist at 888.637.3343.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
A direct rollover occurs when you request that a rollover check be made payable directly to the new custodian for the benefit of your individual retirement account (IRA) or employer-sponsored retirement plan. A direct rollover is not subject to current tax or penalties.

An indirect rollover occurs when you request that a rollover check be made payable to you, after which you deposit the money into your IRA or another employer's retirement plan within 60 days. When such a distribution is made by the plan, the plan is required by law to withhold 20% of the taxable amount for prepayment of federal income taxes. If you wish to rollover the entire distribution, you must make up the 20% withholding out of your own funds, or you will be subject to income taxes and possibly early withdrawal penalties on the shortfall. If you fail to complete the rollover within 60 days, all or part of the money distributed to you will be taxable and a 10% additional tax for early withdrawals may apply.