Withdrawal Strategies / RMD Distribution

Prudent Strategies for
Accessing Your Retirement Income

Whether your next stop is retirement or a new job, leaving your money in your Colorado Retirement Association account can help keep your hard-earned savings going strong.

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Dedicated Retirement Counseling

Few organizations can match CRA’s level of personalized retirement counseling – available at no additional cost. Get the assistance you deserve from a salaried representative.

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Potential Savings

CRA plan participants enjoy minimal administration fees for comprehensive plan management services. And you don’t have to worry about hidden fees – we’re fully up-front and transparent about our costs.

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Flexible Payouts

Select a distribution strategy that fits your financial needs while still protecting your savings and maximizing compounding earnings, such as periodic payments or partial withdrawals. Read more about distribution options below.

Withdrawal strategies

Withdraw what you need

Once you have retired or separated from employment with a CRA member employer and if you want to withdraw from your CRA account, you have three options.

To pursue any of these options, complete the CRA Separation from Employment Withdrawal Request form, which can be accessed through the account portal or by calling 800.352.0313.

We recommend this option as it enables you to access your income when you need it while also keeping the remainder of your earnings secure and working for you. You can set up systematic distributions with specific distribution amounts, and control how much you need every time. And there’s no cost to set up periodic withdrawals with CRA.

If you want to withdraw the full account balance, be aware that there could be tax impacts as a result of the IRS Mandatory Withdrawal requirement, which requires 20% from the withdrawal to be sent to the IRS and applied against your income taxes. (Tax withholding regulations vary with periodic withdrawals. It’s important to review withdrawal strategies with a tax advisor.)

On top of that, you may be subject to a 10% early withdrawal penalty (on the full amount, not the remaining 80%!) when you file taxes if you make a withdrawal prior to age 59½.

While you can essentially set up annuitized withdrawals at no cost with CRA, you may choose to purchase an annuity product through an annuity income provider for a guaranteed stream of income.

To do this, you would roll over a portion of your CRA funds and open an Individual Retirement Account with an annuity provider. Read more about income annuities here

Read more about income annuities here.

If you’re nearing retirement...

Congratulations, your retirement is in view!

As you begin exploring distribution options for your retirement income, reassessing your goals and understanding how much you will need are the first steps to decide which option makes the most sense for you. 

If you decide to make a withdrawal, we’re here to help.

You are not alone if you do not know these numbers. Getting answers requires some detailed calculations. Your CRA account portal features a range of retirement planning calculators to help you get a rough idea, or you can try this calculator.

Within six to 12 months prior to your anticipated retirement date, it’s best to contact CRA to meet with our client services team. CRA offers a range of distribution options for retirees to meet your unique goals and needs. We can discuss these options in detail and help you determine how long an income stream will last based on specified or changing amounts, and an assumed interest rate.

If you decide to make a withdrawal, we’re here to help.

Required Minimum Distribution (RMD)

IRS Required Minimum Distribution is an annual calculation based on account balances and IRS-defined life expectancies for the current year. Generally, beginning the year you turn 72, you must begin to withdraw RMDs from your retirement accounts, unless you are still working at that time.

RMD amounts change every year and are required every year after the aforementioned threshold is met. Also, employer retirement plans can each have their own RMDs, for instance both for your 401(a) CRA account as well as your 457(b) account, if applicable. You cannot pool these RMDs and have them withdrawn from only one of the accounts.

To help make your money last, avoid taking out more than the required minimum and what you need now. It is also important to remember that RMDs may be taxable, and withdrawals could count toward your total taxable income for the year the withdrawal was completed.

CRA offers two options for RMD distributions:

Withdraw the required RMD amount each period by completing the CRA Separation from Employment Withdrawal Request form, which can be accessed through the account portal or by calling 800.352.0313.

CRA can calculate and distribute the RMD amount periodically at your choosing. Just complete the CRA Automated Minimum Distribution Request form, which can be accessed through the account portal or by calling 800.352.0313

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CRA Coronavirus Update

Following are updates on our operations for the foreseeable future until concerns about the spread of COVID-19 have subsided.

  • Calls/Emails – Our call center will follow standard business hours, and calls into CRA offices will continue to be answered.
  • In-person Meetings – To protect you and our staff, in-person meetings with our client services team will be suspended for the foreseeable future. This also includes in-person visits to our offices in Littleton. However, our staff is available to meet with you via web conference.
  • Group meetings – Our client services team has been contacting member employers to reschedule or postpone group meetings that were scheduled for the coming weeks.

Additionally, we wanted to assure you that CRA, along with our investment advisor and recordkeeper, remain steadfast in closely monitoring the markets and executing our fiduciary responsibilities for your retirement savings.

We recognize that recent market volatility may raise concerns. Drawdowns are part and parcel with financial markets, and the markets have weathered similar storms before. As always, it is important to take a long-term view of retirement savings and have diversified portfolios. CRA target date portfolios are designed to be appropriately diversified for a participant’s anticipated retirement year. Employee participants are always welcome to make changes to their investments by logging into their accounts via cra-online.org or by calling 800.352.0313.

*CRA is not an investment advisor and does not make any representations nor guarantees as to the future performance, risk or return of the funds. This plan and its self-direction provisions are intended to constitute a plan similar to that described in section 404(c) of the Employee Retirement Income Security Act and Title 29 of the Code of Federal Regulations Section 2550.404c-1. The fiduciaries of this plan may be relieved of liability for any losses which are the direct and necessary result of investment information given to the employee.

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