Your Financial Future:
Make The Right Choices For Your Retirement
Once your reach retirement, you will face the challenge of deciding how and when you will take your money out to support yourself. When making these choices, you need to decide how you want to receive income after retirement. The choices include receiving monthly income through an annuity, managing your money and making periodic withdrawals, or having some income from an annuity plus some investments.
- How will you manage all of your financial resources? Plan how you will manage your Social Security income, pensions, and savings. For instance, if you have a solid base of ongoing income, you can invest your savings in riskier investments.
- What is your life expectancy? Design a plan for yourself that allows you to draw down your savings at a pace that’s not too fast or too slow. Try to make your money last a least as long as you do. One rule of thumb is to spread your money beyond what experts say is your life expectancy, because that is just an estimate and you may well live longer.
- How will you handle your daily expenses and bills? In planning your investments, keep in mind that you will need to keep some funds easily accessible for every day expenses and bills. Also set aside a sizeable amount for unusual or unexpected items.
- How will you account for increases in your cost of living? As you invest for income and security, try to keep your income rising with inflation.
- What if you don’t have enough? It may be necessary for you to adjust your living standards if your assets will not be able to meet your lifetime expenses.
- How do you account for fixed assets? Consider your home and other fixed assets as sources of income to meet your living needs.
- What about taxes? Stay informed about tax issues affecting retirees. For example, be sure to take the minimum required withdrawals from traditional IRAs after age 70 ½ .
- How involved should you be? Keep track of yow your investments are doing, how financial markets and products are changing, and how annuities might play a role in achieving your goals.
- Who should you seek advice from? Understand how to choose and use investment brokers and financial planners, and be well informed so you can understand their recommendations and advice.