Living in Retirement: Will Your Money Last?

You've worked hard to ensure a financially secure retirement. How can you make sure your money lasts?

As you imagine how you'll spend the rest of your retirement, there are decisions to make about how you access (or invest) your savings.

• Are you comfortable with how you access your funds when you need them?
• Would you rather be paid a consistent amount at regular intervals, as with a salary? If so, do you want to build in regular "raises" over time?

Calculate how long your nest egg will last

Working with a financial advisor can help you create a strategy that addresses your unique needs.

• Consider income tax rules for your retirement withdrawals. Once you reach age 59 1/2, you may start taking distributions from your retirement accounts without paying the 10% premature distribution tax, in the form of a lump-sum or discretionary distribution.
• Understand required minimum distribution (RMD) rules. The federal government requires you to take annual distributions from your traditional IRA once you reach age 70 1/2, based on your account value and life expectancy. If you don't withdraw enough, you'll end up paying penalty taxes. (Roth IRAs are not subject to RMDs.)
• Choose a sustainable withdrawal rate. Finding the right withdrawal rate is the key to making your savings last. A financial advisor can help you choose the best rate for your needs.
• Withdraw from retirement accounts: Most retirees have assets in several types of accounts. Some are taxable (CDs, mutual funds). Others are tax-deferred (traditional IRAs). Still others are tax-free (Roth IRAs). A financial advisor can help you determine the best order of withdrawal for your unique financial situation.

From helping your grandchildren to exploring new opportunities for work and leisure, your retirement dreams will continue to change throughout retirement. That's why your financial plan needs to evolve to give you the freedom and flexibility to adjust your day-to-day finances over time. A financial advisor can help you define your short- or long-term dreams, develop a plan to help you achieve them, and track your progress through retirement.