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Thanks for your detailed and constructive feedback! That's exactly what we're looking for. Hope to become more educated and return the favor to a novice down the road. :)

We're still waiting on confirmation from Fidelity that we can take annual distributions from the 401K rather than take one lump sum (and have a huge tax bill) or annuitize it (and receive a tiny monthly check.) Once we have that informaion, we'll be in a better decision-making position. We'd prefer to take an annual distribution rather than roll it into an IRA because that option offers us more flexibility and we won't be penalized if we withdraw money before my husband reaches age 59 1/2. We lose the penalty exemption if we roll it into an IRA, unless we take SEPP payments. When I used an online SEPP calculator a few months ago, it didn't appear that we could live on the amount that we would be able to withdraw going that route, but I'll re-visit that based upon your feedback below.

Thanks for your suggestion that we continue saving in a tax-deferred manner. That's good advice.

Thanks again for your help :) -kw
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