Protect Your Retirement Savings

As you get closer to retirement, your focus begins to shift from building your savings to how you will withdraw the money. You want to avoid mistakes that could jeopardize the nest egg that you’ve taken years to build. The following steps may help you protect it:

Continue to match your investments with your time frame. You don’t want to risk money you’ll need soon in the stock market, but you don’t want to shift all of your money to cash on the day you retire, either. Some of it needs to grow enough to keep up with inflation over a retirement that may last more than 25 years. You can divide your portfolio into several components, with some in cash for the short term, some for medium term needs and some in more aggressive investments for the long term.

Make your money last. Add up your expected expenses in retirement, then subtract any sources of guaranteed income, such as a pension and Social Security. Some people buy an annuity product, such as a lifetime income fund, to fill any gaps and provide a paycheck that lasts as long as they live.

Avoid withdrawal mistakes. Consider taxes and penalties when deciding whether to keep your money in your employer’s retirement plan, roll it over to an IRA, or switch it to a Roth when you leave your job. Plan the order of your withdrawals carefully when withdrawing the money. See our 10 Question Retiree Guide at www.icmarc.org/realize for more information.

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