As the recession brought home to many people, making your money last through retirement can be a challenge. If you plan ahead and actively manage your retirement accounts, it can help ensure you won't outlive your money.
If you've not yet retired, be sure you:
- Make maximum contributions to your retirement plans with your employer, if available.
- Contribute to an IRA, if you can. Talk to a South Carolina Federal Credit Union IRA specialist about your options.
- Have adequate health care coverage.
- Have long-term care insurance.
- Have an estate plan.
- Pay down debt as much as possible.
- Have your funds invested so that you achieve sufficient income growth without undue risk.
- Increase the amount you save, if you need to play catch-up to meet your goals.
You'll also need to plan how much to withdraw monthly after you retire and from what accounts. Experts advise:
- Don't take Social Security payments until at least your full retirement age (65 to 67, depending on your year of birth); every year you delay, up to age 70, will increase your monthly payments.
- Withdraw from taxable accounts first, so tax-deferred ones (such as 401(k) plans and traditional IRAs) and tax-free ones (like Roth IRAs) can continue to compound longer.
- Postpone withdrawals from 401(k)-type plans and IRAs until age 70 1/2, when you'll have required minimum distributions.
- Withdraw no more than 4% of your retirement funds in your first year of retirement, and that amount plus an increase for inflation in subsequent years.
Throughout your retirement, don't forget to periodically reallocate your assets to ensure you have the mix of investments that works for you. It's a good idea to consult a financial planner, to ensure you're moving in the right direction. Consult with a financial planner at South Carolina Federal Credit Union for help with retirement planning.
Copyright 2010 Credit Union National Association. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.