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Old 01-09-2018,
AdelaideCh AdelaideCh is offline
 
Join Date: Jun 2017
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Default Lining Up Your Sources of Emergency Retirement Cash

Retirees depend on their nest eggs for much of their cash. When money is needed, they plan to raise it from either income generated by the nest egg or sales of assets, such as mutual funds or stocks. Most people enter retirement with no other ways of raising cash.

Selling more assets to raise cash incurs costs. One cost of that is likely to be capital gains taxes if the sales are from a taxable account or ordinary income when they’re taken from traditional IRAs. Annuities are another potential source of income, but you could owe income taxes and perhaps early distribution penalties on additional withdrawals, if the annuity allows access to the money.

With those options, another cost is you’re taking the money out of your nest egg and losing the future income or returns you were expecting. When your cash need arises during a bear market, you have to sell after sustaining declines in value and before the market recovers.
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