Forced to withdrawal at retirement?

[tewing84]

Quick question when it comes to retiring early, say at 60. If you have multiple retirement accounts, say a 401k and a Roth IRA, are you required to pull from both when you stop working or can you leave both of them alone? Also, if you do decide to start taking distributions, can you pull from just one and keep contributing to/growing the other one?

 

[RE2Boys]

Your not required to take any distributions from a 401k or traditional IRA until the year you turn 70.5 years of age. Some companies may insist that you transfer your 401k to a traditional IRA, but that is not common. Roth IRA have no withdrawal requirements.

If an IRA or 401k is inherited, special rules apply.

 

[rodi]

You cannot contribute to a 401k or IRA after you no longer have earned income... so the only growth is compounding over time.

No required distributions till 70.5 for 401k and traditional ira.

 

[tewing84]

Your not required to take any distributions from a 401k or traditional IRA until the year you turn 70.5 years of age. Some companies may insist that you transfer your 401k to a traditional IRA, but that is not common. Roth IRA have no withdrawal requirements.

If an IRA or 401k is inherited, special rules apply.

Great, thank you for your response. I would rather only withdrawal from one, if I need it, and allow the other to continue to grow

 

[tewing84]

You cannot contribute to a 401k or IRA after you no longer have earned income... so the only growth is compounding over time.

No required distributions till 70.5 for 401k and traditional ira.

That would have been my next question, so thank you. Im sure I would still work somewhere part time, but only at a place I'd love and where I wouldn't care about the pay.

Are you only allowed to invest your income from a job?

 

[RunningBum]

Great, thank you for your response. I would rather only withdrawal from one, if I need it, and allow the other to continue to grow

Not sure why, money is money. Unless there is some special investment you can get through the 401K you can't get in your IRA. If it's the other way around, move your 401K to your IRA.

If you have $100 in your right pocket and $100 in your left pocket and need to pay your dinner bill, it really doesn't matter which pocket you take money out of.

 

[gayl]

Are you only allowed to invest your income from a job?

You can invest in a taxable account with anything. But you can only invest in a retirement account with earnings

 

[growerVon]

Not sure why, money is money. Unless there is some special investment you can get through the 401K you can't get in your IRA. If it's the other way around, move your 401K to your IRA.

If you have $100 in your right pocket and $100 in your left pocket and need to pay your dinner bill, it really doesn't matter which pocket you take money out of.

Certainly a lot of truth to this. Some 401ks have rare or low-cost funds not normally available in IRAs. OP also stated the IRA is a Roth so in this case the two accounts have different tax characteristics. The qualified Roth withdraws are tax free (post-59.5), which could be used together with the 401k withdraws (taxed as income) to get a desired amount out while controlling adjusted gross income, resultant tax bracket, and eligibility for ACA premium tax credit. I understand Roth IRAs also have different, more favorable characteristics for inheritance.

 

[folivier]

But with an IRA you have more control over where your money is invested. Also no black-out periods, gee I hated those.

 

[Gotadimple]

But with an IRA you have more control over where your money is invested. Also no black-out periods, gee I hated those.

+1
And in addition to flexibility on fund selection, you can control the cost of funds, thus increasing your yield. Some 401(k) funds have higher expense ratios.