If you have completed the journey to retirement, it’s likely you have demonstrated an ability to plan and manage a financial strategy, and you should be congratulated. After all, a recent Federal Reserve report revealed that 42 percent of Americans under 30 have no retirement savings and 26 percent of people regardless of age have not yet begun to save. However, there is a difference between financial management while you are still working and maintaining your retirement security when the regular paychecks have stopped coming in. Spinnaker Investment Group can offer assistance in ensuring your retirement stays on course for as long as necessary. Begin with these tips:
Maximize your income
Make sure the regular sources of income you will have in retirement will be maximized. For instance, many people retire and wait a few years before beginning to collect their Social Security benefits. Similarly, pensions and annuities may have variable incomes based on when taken. The closer your regular income comes to your living costs in retirement, the less you need to withdraw from other sources.
Establish a withdrawal plan
Based on budgetary necessities, many financial advisors suggest it’s prudent to withdraw between three and four percent of the total value of the retirement savings each year. This will allow savings to continue to grow and ideally keep pace with inflation. Also, consider the tax implications for withdrawals from different types of accounts.
Be prepared for out of pocket health expenses
Retirement planning experts report that many retirees spend over $100,000 on healthcare costs during the course of their retirement, and this does not include long term care. Have the best insurance you can, work to stay healthy, but realize every expense may not be covered.
Planning is important but be mindful that your retirement should be a journey and not a destination. You may find you want to spend more money and do more things in your early retirement years than later on. That’s okay for a while, but if you’re overspending your budget year after year, it’s time to re-evaluate.
Create a bucket system
Have different groups of investment, one for cash reserves, one for intermediate investing of five years, and one for longer investing of 10 years. Cash reserves should be sufficient to cover withdrawals for three-five years plus emergency funds.
Be realistic and prioritize
Few retirees can have it all, so it’s necessary to know what’s important to you. Thankfully, most of us have a better idea of what we want as we get older, but there is always the potential that aging parents or adult children may find themselves in distress. Family is important, but it’s essential to make yourself the number priority in retirement.
Spinnaker investment group can help you achieve financial independence. Contact us today for individualized solution options for your particular situation.
The information contained herein, while not guaranteed as to the accuracy or completeness, has been obtained from sources we believe to be reliable. Opinions expressed herein are subject to change without notice.