McLEAN, Va. (5/26/15)--When you retire, the word “risk” takes on new meaning with regard to your finances. Before retirement, while you’re building your savings, market volatility is your risk. Once you retire, the risk is not having enough money to fund your needs (USA Today May 17).
If you’re facing a savings gap as retirement draws near, your drawdown strategy is even more important. You face several key unknowns: how long you will live, what returns your investments will earn, inflation, and medical expenses in later years.
Here’s advice that can help you best use the savings you have and improve the likelihood that your money will last as long as you do:
The worst thing you can do is nothing. Carefully select a method for drawing down your assets, planning your spending, accounting for taxes and creating a cash reserve to protect you from poor investment returns and unexpected expenses.
For related information, read “Retirement: More to Prepare Than Finances” in the Home & Family Finance Resource Center.