Money Management Strategies for Retirement
After planning for your retirement for what seems like an eternity, when it’s time to start living it, it’s important to manage your money to ensure that your nest egg can provide for you through your golden years – without forcing you to scrimp or even un-retire.
Bankrate.com suggests considering these things when you are at the beginning of your retirement journey:
Determine Your Budget
As at any stage of life, a budget plays a key role in successful money management. Consider your new retirement lifestyle when creating your new budget.
Are you planning on traveling? How will you pay for health insurance? How much money do you have coming in from your retirement account and social security?
You’ll have many new questions to answer when you create the new budget.
It’s very important to ensure your spending early in retirement doesn’t derail your plans further down the road. If you deplete your financial resources early, you may need to cut back later on or possibly go back to work.
Assess Your Assets
Look at how much you have immediately accessible in bank accounts, taxable brokerage accounts, IRAs, and elsewhere. If you’re older than age 59½, you can access retirement accounts with no penalties, and if you’re older than 62, you can start taking Social Security – though it is important to carefully assess the best age for you to access Social Security benefits.
Based on your budget, you should calculate how long your assets will last until you need to begin to access more income.
Consider Which Accounts To Withdraw From First
Make the most of your tax-advantaged retirement accounts. The longer you give them to compound without having to pay tax on the gains, the better.
It is recommended that you withdraw from your taxable accounts first, followed by tax-deferred accounts so those accounts can continue to grow.
Continue To Save
Even after retirement, it’s important to have an emergency fund at your disposal. Build savings into your budget if you don’t have at least one year’s worth of expenses available in cash. You don’t want to have to dip into your IRA or other retirement accounts if you have to pay for an unexpected expense like a home or car insurance deductible, new refrigerator or medical bill.
We want you to have the ability to retire comfortably. That means making smart decisions that will help you maximize what you already have. By balancing your spending with your income, you’ll avoid outliving your assets, and by taking a conservative path early, you’ll enjoy the later years even more!
It’s important to take calculated steps to reach your goals. YOUR Credit Union is here to help you at every stage. Whether you want to start an IRA, want help creating a budget or a savings plan, or need advice before purchasing insurance, Ironworkers USA Credit Union is your partner.
Give us a call at 1-877-769-4766, stop into one of our branches or chat with us online in the bottom right corner of the screen!