I recently retired with a $43,000 annual pension for life. I am 55. I have $340,000 in my 401K which have been earning about 15% a year in a balanced fund. My wife and I also have about $50,000 in IRAs. According to my 401K administator (METLIFE) I can start withdrawing now from my 401K now without paying a 10% penalty. (I will double check with the IRS) What would be the best strategy for withdrawing money from my 401K plan (say $20,000 a year)? Would a varible annuity make sense or would that be too expensive? (I don't like annuities any more than you do -- but what about Vanguard?)You have made the decision to take out 20,000 so I guess the question is should you take it out in one or more withdrawls. I would take it out at the beginning of the year (January) if the market is up. If down I would postpone until the market goes up.I would consider the pension as fixed income investments and get out of the balanced fund into equities. The 20,000 withdrawl is rather high, espicaly if your pension is not inflation adjusted.The annuitie will only give you certanity and less money. Inflation maybe your biggest problem. Your income may have to double in retirement to keep your purchasing power level.Read the retire early home page board. Look for withdrawl rate and asset mix posts. Maybe go back one or two thousand posts and skip all that ref IRA, 401k etc.
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