Managing Your Retirement Money

Now that you have reached retirement age, the time for saving up for your retirement has officially ended. Now that you have finally reached the period of retirement where you now have to put your retirement fund to work, your concern should now shift towards how to manage your retirement money better to make them last a long time. There are certain tips that may be able to help you do this.

Once you have reached retirement age, you now have to see it that the retirement fund that you have saved up for all these years can be put to good use. But along those lines, you should still need to be concerned on how you may be able to stretch the money or fund that you may have for the longest time. Spending it wisely may still apply, now even more so since you no longer depend on any other income to provide for your needs.

A good hint in trying to stretch your retirement fund is by limiting withdrawals of your total retirement fund at three to five percent each year. This will allow your fund to still earn enough to make up for the withdrawals that you make each year. If you have placed your fund in even better choice of investments, it might even earn a bit more than what you take out of it.

Another tip of trying to stretch your retirement fund longer is by trying to minimize on your expenses. For this, you might need to think of downsizing. Now that you have retired, possibly with your children already living on their own, you might consider downsizing to a smaller home or move to a less expensive area in order to save on expenses. You might also consider getting some part time job on the side not only to keep you active but also to help add up some income into your fund.

When using your retirement fund, try to make use of your tax-deferred savings for last. Try to use your non-retirement savings and assets first. It would serve you better to have your tax-deferred accounts earn longer for you. And what’s more, early withdrawals on such accounts may also be charged with penalties.

Opening an immediate annuity can also be a good means to help you continuously receive a fixed amount each month. Having an immediate annuity can guarantee you that you have a steady stream of income for the rest of your life. This is because such an annuity can be obtained by giving a lump sum of money to an insurer in return for receiving a fixed amount of money each month. But before you plan on getting an annuity, you should also need to talk with a good financial advisor for this.

Having a trusted financial advisor to help guide and help you with your retirement fund. A good financial advisor can help you on how you can go about withdrawing your savings that can be stretched out for the longest period of time as well as provide a comfortable amount that you can work on to last you through your retirement.


Posted by Ardent Editor on Oct 31 2007 in Financial Planning

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