11 ways to save after retirement
an ideal world, the onset of retirement would be greeted with relief: Finally,
you can leave the rat race for good and spend time doing what you really want.
Unfortunately, many Americans see retirement as a hard-and-fast deadline, beyond
which, if they haven't saved a vast mountain of cash, they'll just have to do
without. Catfood anyone?
Relax. It doesn't have to
be that way. Here are some steps you can take to ensure your golden years stay
|Careful planning, money management and saving will
go a long way toward making your retirement years relaxing -- not taxing.
|Maximizing retirement money
Draft a financial plan. "The great fear is running out of money,"
says Chris Farrell, host of the "Right on the
Money" and author of the financial advice blog "My Two Cents."
"That's the paralyzing fear every retiree has."
a financial game plan will help you manage your fears, as well as your money.
Determine where your money will be coming from -- investments,
pensions, Social Security or savings.
"You want to keep
your money in [tax] deferred vehicles as long as possible," says Wayne G.
Bogosian, co-author of "The
Complete Idiot's Guide to 401(k) Plans." "Tap the ones that aren't --
like Social Security, traditional pensions and personal savings."
out what you need coming in each year to live the way you'd like, and allocate
your money accordingly. Typical strategies are to keep a certain percentage of
your savings in cash or CDs (liquid), a certain amount in bonds (mid-term payoff)
and the rest in stocks (long-term investments).
Set a budget.
"Look at what you want to do," Farrell says. "In the early years
of retirement, be a little on the cautious side, but don't deny yourself."
Review your finances, at least annually. "See where you
are and what you want to do," Farrell says. "Spend in such a way that
you are enjoying your life."
Keep a little something
tucked away, "but you never come back, so you might as well enjoy it."
When it comes to retirement savings accounts -- IRAs and 401(k)s
-- taking out 4 percent a year is a standard yardstick.
you only spend 4 percent of what you've got, it's virtually impossible to run
out," says Clark Howard, host of a nationally-syndicated consumer radio show
and co-author of "Get
Clark Smart: The Ultimate Guide for the Savvy Consumer."
be flexible enough to look at your special circumstances and goals. Remember,
if you deplete your investments early on -- even if you work part-time and continue
investing -- it will be tougher to make up the difference. Best bet: sit down
with a financial planner who specializes in retirement distribution analysis,
and figure out a spend-down
rate that works for you.
Make sure your expert makes money
only from offering advice -- not from commissions on products sold to you or through
transaction fees every time something is bought or sold.