St. Patrick's Day is the season for celebrating luck, and luck is the traditional wish for anyone trading a job for retirement. "Congratulations and good luck," we tell retirees as they go out the door.
The unspoken reality is that most retirees these days are going to need all the luck they can get as they leave behind a regular paycheck.
My favorite Irish toast is this one: "May your bank account always be bigger than your troubles." For most of us hanging up our work boots, it is going to take both savvy retirement planning and considerable luck to make that happen.
Here are five ways to put a shamrock or two on your side:
Pay off your mortgage. For most people, keeping a roof over their heads is the single largest financial obligation. If you can limit that cost to taxes and maintenance, the less money you'll have to pull out of your nest egg every month. If your money is in an IRA or other tax-advantaged account, taking out a big chunk regularly to pay your mortgage raises your income tax liability, and that nibbles away at your savings some more. Having no mortgage also reduces the possibility you'll face shortfalls if the value of your nest egg drops for some reason beyond your control. Let's say you have some really bad luck....
Manage your credit. While it may feel like a good idea to pay off all credit cards and depend on cash alone, you have to use credit to keep your score high enough that you have some available for emergencies and just plain convenience. Having no -- or worse yet, bad -- credit is an unlucky position to be in.
Understand what you're getting from Uncle Sam. Consider the long-term impact of when you and your spouse take Social Security. The Medicare Advantage or Medicare Supplement plan you choose and how you select your Medicare Part D prescription drug plan also can have a significant effect on your financial wellbeing. Don't depend on luck when you make these decisions. Study up, ask questions about your particular situation and, at the very least, use an expert calculator.
Don't be too trusting. Scams perpetrated on older people abound, including those that can wipe out even a big savings account. Keep your antenna up, and remember, if it sounds too good to be true, it probably is.
Keep on top of your finances. There's no better way to make your own luck than to manage your money wisely. While getting sophisticated advice can be a good idea, in the end, it's your money. Or as the saying goes, "Fortune favors those who help themselves."
Happy St. Patrick's Day.