10/17/2011 5:58 PM ET|
6 tips to make your nest egg last
Retirement funds need to last a lifetime, which means more than just investing wisely. Certain steps can help maximize the amount of money you'll have when the paychecks stop.
One of the worst situations to be in during retirement is running out of the money you've set aside for your golden years. Making your retirement fund last should be one of your top retirement-planning priorities.
So we are left to deal with market volatility and must trust that we will be rewarded for taking on additional, age-appropriate risk. Our investment portfolios must also be dynamic. We will need to adjust to a constantly changing financial picture in retirement.
Here are six things you can do to give your retirement funds a much better chance at lasting throughout your lifetime. (Are you saving enough for retirement? Get an idea with MSN Money's calculator.)
Take less out after a bad year. This sounds obvious and simple, but it's not always easy to do. You have to be willing to make temporary sacrifices so your investments have a chance to recover in value. You also need to avoid making hasty and emotional decisions when you can least afford to do so. Decide ahead of time whether you will give up inflation adjustments after a bad year, or flat-out reduce the percentage of your assets that you will withdraw.
Take more from the best-performing assets. You will likely hold a diversified range of assets in retirement. It is likely that some of what you own will perform well in certain years, while other investments will do better in other years. One way to help make your retirement assets last is to withdraw what you need from the assets that are performing well. This way, you are naturally selling high.
Have a plan. With the exception of cutting withdrawal rates in years when your investments perform poorly, don't otherwise overreact to stock market swings. Some people get out of the markets at the worst possible time. And during retirement, you are the most vulnerable because your assets are at their highest point and your income is at its lowest. A well-thought-out retirement plan can help keep you calm so you don't act irrationally in times of short-term crisis. Create a plan ahead of time so you can go back to read it and realize that the recent market downturn has already been taken into account.
Develop an income stream. With the help of the Internet, many people are making side incomes working from home. This is perfect for people who are retired because they don't have to commute. Also, no one will know how old you are, so there is no opportunity for age discrimination.
Climb the corporate ladder now. Work hard and do what you can to advance your career. Not only will you have more money to save, but both you and your employer will also pay more Social Security taxes on your behalf, boosting your future Social Security checks.
Check out annuities. It's hard to recommend annuities based on projected returns. But there's a certain amount of security that comes with knowing that you will get a check every month no matter what happens. Having Social Security and an annuity that covers a significant portion of your living expenses will free you from having to worry about stock market volatility in retirement. And that can be worth much more than striving to maximize your investment returns.
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If you make a bad investment don't blame Obama he is not the problem and he's not God, this world was mess-up before Obama became President, blame your four fathers and their after, even the President can't perform miracles, we make bad choices sometimes, but the way that the economy is going you still have to survive, and sometimes that mean taking money from your retirement.
You voted for Obama to:
1. Make things better
2. Keep things the same
3. Make things worse
If you selected #1 you lost.
If you selected #2 you lost.
If you selected #3 you are an idiot or a sadist.
Ok, so for investing, it's recommended that one put in the same amount consistently, rather than try to time the market, as one cannot tell if the market is going to go up or down with any consistency. Yet this article says to take it out when one has a good year and not so much when one has a bad year...to wit, put it in regardless, but take it out by timing the market?
Being one of those retired people, there is a constant stream of expenses that doesn't change in character (although they always increase) - such things as heat, light, water, and groceries. There are others one can try to reduce, like clothing, fuel (with no commute), personal expenses. It would take uncommonly good luck to time planned increases in expenses that are variable in nature to those 'good years' (ah...when do we get those, BTW?) As such, people living on the edge of income and expense don't usually have the option of such timing.
give me a break.... Suze has no idea what she is talking about... check the national averages... A person in this woman's income level and age has an ANW of about $180K... She is 4 times more + than the averages.... C+???????? More like an A!!!!!... However I am wondering if she has only about $700 per month positive income after expenses then how did she accumulate so muchin investments.. I would love to see her investment picks....
What a useless article! Where was this in 1999, when it might have been helpful? BEFORE Greenspan, Bush/Cheney, and Osama destroyed all the lifetime earnings of those wishing to retire now?
And don't even get me going on that stupid airhead, Orman.
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