The Motley Fool says people about a year from retirement should review their IRA’s stock-and-bond mix, set a withdrawal plan and consider converting traditional IRA funds to a Roth; a roughly equal stock-bond split may make a 4% withdrawal rate appropriate.
The article warns that holding 90% of retirement savings in stocks could expose them to steep losses in a downturn. It says withdrawal rates should reflect the portfolio, with a more conservative mix potentially calling for a lower rate.
The article says required minimum distributions (RMDs) from a large traditional IRA may increase taxes and could lead to Medicare premium surcharges. A full or partial Roth conversion would move funds into an account where they can grow and be withdrawn tax-free, and Roth IRAs have no RMDs. It suggests planning a conversion, possibly after work ends if income falls, when it may be more tax-efficient.
