5 Smart Strategies To Make Your Retirement Money Last As Long You Do
5 Smart Strategies To Make Your Retirement Money Last As Long You Do
You need some thinking and planning to make your retirement money last as long as you do. There are things you can do to make your dollars stretch.
Plan. Plan. And plan. That’s your first task.
Figure out how much money you’ll need in retirement.
(P/S: According to experts, typically you need at least 70% to 80% of your pre-retirement income, for your retirement needs)
Make your money last. Your money must last as long as you do.
Lots of people think they’ve enough money to last throughout their retirement but in actual fact they don’t because they could have overlooked the fact that:
- They don’t save enough
- They don’t invest wisely
- Their investments don’t keep up with the inflation
- They don’t have a pension that pays income for life
- They withdraw too much
Per financial experts, you can take out 3% – 6 % of your assets each year in retirement and you would have enough to last. Most of them recommend you take out 4% and most caution that if you withdraw more than 5%, you increase the risk of going broke during retirement.
Here are 5 strategies to help you stretch your retirement dollars:
- Have a portfolio of investments consisting of a mixture of stocks, stable bonds and treasury bills and cash (personal savings). While investing would be risky; a carefully selected portfolio of stocks would yield higher returns hence more money for you
- Plan how to smartly withdraw money from different accounts – take money from your regular taxable accounts first and let your tax-deferred accounts grow as long as possible; you only withdraw them last
- Decide when you want to start your Social Security benefits. You would get a reduced benefit if you start at age 62. But if you wait until your full retirement age (between age 65 and 67), you would get your full benefit. So, the point here is – if you can afford to wait longer, your benefit amount would be higher
- Consider getting a long-term care insurance to fund your healthcare expenses because they could cut a big chunk off your retirement money and disrupt all your financial and investing plans
- Think about working at retirement jobs – could be anything from part-time selling
(P/S: Social Security provides a strong base of your retirement money. It’s the largest source of income for most retirees. However, Social Security benefits will replace only about 40% of your paycheck. So possibly you will need other sources of retirement income)