How To Make Your Retirement Savings Last
Thanks to major advances in the health sciences, life expectancy has never been greater than ever. With the average baby boomer expected to live to 77 and beyond, there’s never been a more well-positioned generation to enjoy a long and comfortable retirement – but are your retirement savings up to standard? With the oldest baby boomers just reaching sixty this year, it’s more important than ever to make sure that your savings and investments are healthy enough to last you well beyond fifteen to twenty years.
So what can you do to make your retirement savings last?
First, you’ll want to make sure that your investments are ready for retirement in five to ten years. Head to your investment firm to get the kind of financial check-up you need; this includes reaffirming your retirement plans with your investment advisor, underlining when exactly you’d like to retire and what you need to do to turn your savings and investments into actual cash in your bank account.
Of course, even the most well-meaning retiree runs the risk of blowing his or her retirement savings if there’s no strict budget to follow. It’s hard to predict what you’re going to be spending your money on in the future or what emergency expenses are going to pop up (hospital bills, anyone?), but if you want to make your retirement living a happy and comfortable one, you’re going to need to set a withdrawal budget. Financial experts recommend withdrawing only 4 to 5 percent of your total savings for the first year; while this may appear to be conservative – especially if your nest egg isn’t up to scratch – this will help you to better outlast shaky market conditions and inevitable inflation that will occur in the future. This conservative withdrawal habit will balance out with the further growth of your savings and investments, which should continue to increase as the years pass.
Don’t forget about your Social Security checks, which far too many baby boomers are depending on in order to pay for basic necessities. If you’ve been smart about your retirement plans, then your monthly check will probably provide additional lining for your cash cushion – but have you considered when you should start collecting? You can start receiving Social Security payments at the age of 62, but this will greatly reduce the monthly payout amount by up to 25%. If you can, start collecting between 65 and 67; this way, your retirement savings will receive a nice financial boost courtesy of the government.
For more information on smart retirement planning, visit www.kenhimmler.com, the IRA and 401(k) experts!
Authored by Kenneth Himmler, Sr.
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