Making Your Retirement Income Last Longer

You've finally hit the wonder years. You no longer have to pull the sheets back early in the morning to head off to work, and best of all, if hitting up the greens for a nice round of golf on a Tuesday is what you feel like doing, then that's perfectly okay.

Here's a quick look at a few tips that can help your money last longer in retirement.

Pay Close Attention to your Withdrawal Rate

Now more than ever, having a budget and sticking to it will be of the utmost importance. If you withdraw more than your investment plan calls for, you'll find yourself dwindling down your retirement savings more quickly than anticipated.

Review your withdrawal rate with your financial advisor during your quarterly reviews. You may find that you could decrease, or even increase, your withdrawal rate and still be fine according to your investment plan. Pay special attention to your withdrawal rate during down markets, as withdrawing from a portfolio with a lower value can have an adverse effect on your long term retirement goals.

Finally, many retirees decide to relocate closer to family or downsize their homes. Reducing or limiting the expenses you no longer need or want is a good way to potentially help your investment plan and ability to maintain.

Increase your Social Security Income

The longer you wait to tap into your Social Security benefits, the better off you can be. In fact, your benefits will increase by seven to eight percent for each year if you delay until your reach 70. This can be of great benefit to making the most out of your overall retirement funds.¹

If you need to tap into your Social Security benefits before 70, there are still ways to potentially maximize your social security income. The Restricted Application for Spousal Benefits allows one spouse starts collecting spousal benefits, while the other spouse's benefits are not touched but still appreciate by 8 percent each year until they are tapped into when the spouse turns 70. This can significantly increase the higher earner's benefits. And all the while, the spouse who doesn't tap into his or her retirement can still withdrawal half the amount of the other spouse's retirement.²

Also consider the File and Suspend Strategy.

Review your Investment Plan Quarterly

You need to review your investment plan at least quarterly. As your goals change, your investment plan needs to be altered accordingly. So if you want to purchase a home, then you'll need to rearrange your financial activities so that they can support this goal. With a qualified financial advisor, you can review your investment plan and make adjustments for things like buying a new home, changing inflation rates, rising health care cost and current and future goals.

Effective retirement planning is an ongoing process and making the most of your retirement income and assets is important. Give one of our Wealth Managers a call at (800) 541-7774 to discuss ways to maximize your retirement income. You can also get started on your Investment Plan by answering a few brief questions here.

By Michael J. O'Connor, CWS^®

Michael is a Certified Wealth Strategist and Wealth Manager at WrapManager, Inc.

Sources:

1 JP Morgan Guide to Retirement

2 Forbes