The day will come when you’re no longer living on a paycheck but instead can start using your hard-earned savings to live your best life. You won’t use your savings all at once, of course. You’ll draw an income from it, which means you’ll need a plan to keep the balance growing so that you have a steady, reliable income stream for years to come.

Here are a few things to be mindful of as you develop your strategy:

Avoid early withdrawals: You’ll pay a 10% IRS penalty on your withdrawals if you take money too early (before age 59½).

Consider taxes: Most withdrawals are subject to income tax, so it’s important to consider the tax implications of your distributions.

Weigh your Sandia 401(k) distribution options: The plan allows you to take a lump sum or up to 13 distributions per year. At a minimum, each distribution must be $500.

Understand the impact of required minimum distributions (RMDs): Each person’s required minimum distribution (RMD) situation will be different. Contact Fidelity to learn when you will need to start taking your RMD.

Keep your personal information current: Ensure your beneficiary and contact information, including your personal email address and home address, are up to date with Fidelity.

Planning your 401(k) drawdown strategy carefully will help you enjoy a financially secure and fulfilling retirement. Fidelity can help.

Did you know that Sandia allows retirees to keep their account after retirement? Leaving your money in the plan has several advantages.

Tax-deferred growth. One of the primary benefits of keeping your account at Sandia after you retire is that your money can continue to grow through compounded interest and investment returns. Although you’ll be taking distributions from the plan, the remaining balance can continue to be managed and invested.

Low-cost investments. The 401(k) is designed to offer a diversified mix of institutionally priced investments that benefit all participants. These investments typically cost less than those available in an IRA or an insurance product like an annuity.

No learning curve to traverse. Another significant benefit is the comfort and ease of having your money in a place where you can leverage services you’re familiar with, such as the website, where you can model projections or make changes; the call center, where you’ll find live help instead of a bot; and extra perks like on-demand educational content and professional guidance and advice.

Regulatory oversight. The 401(k) is regulated by the Employee Retirement Income Security Act (ERISA), which ensures the plan is managed responsibly under fiduciary governance. Sandia manages and monitors the plan on your behalf in accordance with ERISA.

You’ll want to weigh these benefits against any potential disadvantages, such as being limited to the investments in the plan.

Get answers to all your Medicare questions. Even if you’re not Medicare-eligible yet, it’s good to know how your Sandia medical benefits (if you are eligible for them) will coordinate with Medicare, so you better understand the financial impact of your healthcare costs in retirement. For everything you need to know about Medicare, visit medicare.gov. There, you can create an online account, find information about health and drug plans, locate providers and sign up for automatic alerts so that you stay up to speed on the latest Medicare news and updates. You can also access the 2026 Medicare and You handbook.

If you’d prefer to speak with someone, call 800-MEDICARE (800-633-4227). TTY users can call 877-486-2048.