> Can I withdraw $1000 monthly from my 401k without losing principal?

Can I withdraw $1000 monthly from my 401k without losing principal?

Posted at: 2015-07-28 
I currently have $250,000 in my 401k and want to retire at the end of the year. I'll be 63.5 yrs. old. My social security check will be $1950/mo. I'll need to withdraw about $1,000 per month to supplement my SS, but will my 401 last 20 years? I'm not great at this kind of math. Any math wizzes out there?! Thank you!

p.s. yes, I know the longer I delay SS, the bigger my check will be, but I've worked 45 years straight and am DONE!

if you have 250K in the 401k, you are probably earning about 10K to 12K a year if you are in stock funds which is about 5% annually (no bonds). so, yes you could withdraw no more than 1K monthly. but your concept of principal is not correct, this 401k is not a cd and it is not a bond, the earnings will vary from month to month. Your 1K per month withdrawal should last a lot more than 20 years because the 401k will be earning throughout the period. Keep in mind you will have mandatory withdrawals at age 70 1/2, which will be formulas supplied by the IRS

As others have pointed out, you could probably withdraw about $10,000 a year from the account and have it last through your retirement. (The rule of thumb is that you can withdraw 4% of the account value in the first year and then increase that by inflation each year and have the money last about 30 years.) But, if your earnings on the account drop significantly (the market tanks again, for example), or inflation spikes, you're going to have a problem. Personally, I'd rather have a bigger cushion than that.

Some claim you can withdraw 4% if you are invested so about 10K a year if you need it to last 30 years but still a chance of failure. You don't have enough to retire and too young for Medicare. Consider a part time job if you can't stand a full time job if you can earn 5K a year for the next 10 years you might not end up eating cat food.

Well, $1000 per month is $12000 per year, so 20 years of that would reduce your account by $240,000.

But this has nothing to do with principal. You are reducing your account by whatever you draw each month. If the balance continues to earn interest over that time, likely, then your balance should remain positive.

Should last over 20 years.

Don't the simplest estimation, it seems you might have to be earning 5% interest to get that $1000 a month, these days that's a high savings earning,

If I were you, I'd work part time just for cash..maybe under table selling crafts or doing EBay..refinishing Furniture or logging community service hours against your taxes, get more money back each year. Be creative.

FYI, you cannot withdraw from your 401K while still working at the same company.

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