Your money should last as long as you do

You've spent a lifetime working hard, anticipating your dream retirement. What you didn't anticipate are the recent dramatic economic and legislative changes affecting your retirement.

These changes may have left you feeling insecure and wondering:

• Do I have enough savings to last me through retirement or will I need to go back to work?
• How can I adjust my retirement income strategies based on the current value of my portfolio?
• How can I feel prepared to deal with health care and tax changes?

Here are some smart steps you can take right now to:

• Realign your retirement investing strategies with today's realities
• Gain control over your retirement income stream
• Feel prepared for health care and tax changes

Realign your retirement investing strategies with today's realities

Did you shift into safer investments as you moved into retirement, hoping to protect your assets so they could last through your retirement? Have recent market fluctuations left your conservative portfolio smaller than it once was?

You're probably feeling unclear about what you should do with your portfolio next:

• Shift it into an even more conservative investment strategy to protect what you have left?
• Move into growth investments to rebuild your retirement assets?

What is clear is that this is the right time for you to evaluate your risk profile. A financial advisor can work with you to review your current portfolio, re-evaluate your retirement lifestyle, and help you consider your feelings about risk. Then he or she can help you rebalance your portfolio so you can feel better prepared to enjoy the rest of your retirement.

Some more conservative saving and investing strategies you might want to discuss with a financial advisor include:

• FDIC-insured savings accounts, money market accounts and certificates of deposit (CDs). Savings and money market accounts offer you immediate access to your money; CDs may offer higher interest rates. With FDIC insurance, all these investments offer unsurpassed safety — without exposure to market volatility.
• Fixed annuities can provide a guaranteed fixed rate of return on your investment and comfort knowing your original investment is protected, no matter what's happening in the market. Fixed annuities guarantee a minimum interest rate based on which annuity you purchase.

Talk to a financial advisor about yield-producing investments including:

• Dividend-paying stocks
  Dividends paid by large, established companies have been a potential source of income for decades. Dividend paying companies tend to be financially stable. In addition, average dividend yields are currently at their highest levels in over a decade and offer a higher yield than 10-year Treasury notes.
• Investment-grade bonds
  High quality corporate and government bonds have historically offered important diversification benefits for equity investors, in large part due to their goal of income.
• Solutions with built-in advice take the confusion out of selecting appropriate investments. Ameriprise Financial gives you access to a broad range of sophisticated investment solutions that simplify retirement investing. A financial advisor can help you use these products to build a portfolio that matches your risk tolerance, tax situation and investment objectives.
• Single strategy mutual funds, which focus on specific investment objectives, such as income or growth. A well-balanced, diversified portfolio can help you meet your income goals.

Another option for retirees who are comfortable with additional risk are variable annuities, which allow a variety of investment options, offer tax deferral and the potential of higher returns, let you receive periodic payments for your lifetime and guarantee payments to your designated beneficiaries if you die before making withdrawals. All guarantees are based on the continued claims paying ability of the issuing company.

Tip: Working part-time in retirement can stretch your retirement funds and provide social and intellectual fulfillment. If you began taking Social Security in the years before you reached full retirement age, during 2009 you can work part-time and earn up to $14,160 before your Social Security payments would be reduced. Once you reach your full retirement age, you can earn as much as you like without having your benefits reduced.

Gain control over your retirement income stream

You control the most important aspect of your retirement security: the amount of money you withdraw from savings each year. Talk with a financial advisor about balancing your income against your expenses and needs. There are no required minimum distributions from retirement accounts in 2009, so funding your routine expenses in other ways may give your retirement investments extra time to grow.

Some ideas you might want to consider:

• Refinance existing mortgages.
  With interest rates at historic lows, now may be a good time to secure a low-interest, fixed-rate loan. A lower monthly mortgage payment means lower monthly expenses.
• Explore the possibility of a smaller home.
  Under current tax law, you pay no capital gains tax on up to $250,000 in profits ($500,000 for a married couple filing jointly) when you sell your primary residence. You must have owned and occupied the home for at least two of the five years before the sale. Choose a new, smaller home and you may enjoy lower property taxes, utilities, maintenance costs and other expenses.

Prepare for health care and tax changes

Health care
With all the changes being discussed related to health care coverage, you might want to consider meeting with a financial advisor for a comprehensive protection review. During this review, an advisor will take you through a series of questions that can help uncover gaps in your current protection plan. Then an advisor will offer you specific steps you can take to fill those protection gaps.

Tax
Have you taken a fresh look at your tax-management strategies lately? A financial advisor can meet with you to help you make sure you're aware of all the tax-advantaged investment opportunities available to you, accessing your retirement distributions in a tax-efficient way, and alert you to changes to tax laws that appear on the horizon.

Contact an Ameriprise financial advisor to schedule a New Perspective review. This complimentary review will provide you with an overview of your complete financial situation, along with direction and clear steps you can take right now to get back on track to enjoying your retirement for as long as it lasts.