You’ve likely planned ahead by putting money into retirement. Now, if your retirement is coming up within the next five years, it’s time to start mapping out a plan for taking money out. Yahoo Finance sat down with retirement and financial planning experts Avani Ramnani and Jean Chatzky to talk about strategy for making your retirement money last as long as possible.
Draw a line in the sand
Ramnani says this money will likely need to last for many more years, so it’s wise to draw a line on how much you need to take out in the beginning of retirement. “You might live another 20 or 30 years in retirement… But think about how to stagger those retirement monies coming out in a smart way.”
It’s not a one-time withdrawal
Ramnani also says money should gradually come out over a number of years, and you need to have a plan. “Think about how much you need for expenses every year, how much can you afford to take out… without compromising your long-term security,” she says.
‘Consider an annuity’
Chatzky points out that many Americans fear running out of money more than they fear death. To help you sleep better, Chatzky offers the solution of taking a chunk of retirement money and converting it into an immediate annuity so they have a “paycheck” of sorts which will supplement Social Security. Chatzky specifies that “it’s not a solution for all of your money, you still want growth in the market, but it can make people feel a little bit better.”