Keep the fun going in retirement with installment withdrawals from the DCP
We get it! The idea of a large lump-sum payment from your retirement account may seem like the perfect way to celebrate your golden years. But, when it comes to your retirement income, taking installment withdrawals rather than a lump-sum may be a better way to keep the fun going for the long-haul. Here’s three reasons why you may want to consider periodic installment withdrawals for your retirement income strategy:
It may be hard to pace yourself
Let's face it, when you have your life savings looking right at you, it may be easy to go a little overboard. But with installment withdrawals, you can spread the joy out over time and avoid depleting your nest-egg too soon.
The IRS might end the fun early
Taking a large single lump-sum payment (unless you are rolling it over to another tax-qualified account like an IRA) instead of taking periodic withdrawals over time may carry significant and immediate tax consequences.
High fees can be a party-crasher
The City of Los Angeles is continually negotiating low fees for the investments funds participants choose in the DCP. When choosing installment withdrawals, you remain part of the DCP “party” and can continue to enjoy the benefits of the plan.
Rest assured, the DCP gives you the flexibility to determine a retirement income approach that's for you. Visit the distributions page on LA457.com below or schedule an appointment with one of our retirement counselors so you can enjoy your retirement years with confidence.