You’re ready to retire…or you think you are. The question is, do you have enough financial resources? Here are factors to consider when making the determination:
What To Expect
- A long life. According to the National Center for Health Statistics, for a 70-year-old male, living to age 83 or older is not out of the question. For women, it’s 85 or older. Genetics, good health and an active life style can push the numbers even higher.
- Inflation. As the cost of goods increase, the amount you’ll need to withdraw from your retirement assets for living expenses will rise also.
What Not To Expect
- A large reduction in living expenses. True, you may no longer be wearing suits or driving to work. But you’ll probably spend more time on hobbies or traveling, both of which cost money.
- A lifetime pension. Based on current news reports, a steady stream of retirement income from your employer is unlikely. And while Social Security may be around for many more years, there’s no guarantee payments will be indexed to price hikes.
How To Stretch Your Nest Egg
- Pay off your mortgage before you retire. Eliminating the monthly payment can put breathing room in your budget.
- Review your investment strategies. To take the place of your paycheck, consider adding assets to your portfolio that provide regular income. Certificates of deposit, mutual funds, bonds, rental real estate and dividend paying stocks can round out your revenue stream.
- Investigate your alternatives. Options for supplementing your income include spending down a percentage of your principal, investing in an immediate annuity, or taking out a reverse mortgage on your home.