How long might you live in retirement? Think carefully. Your answer could influence whether you have enough money for a comfortable retirement or just scrape by.
Many Americans do not realize that one of the greatest threats to their financial security in retirement may be the risk of outliving their money. The first step in tackling longevity risk is to figure out how much you can realistically afford to withdraw each year from your personal savings and investments.
Next, develop a plan to make the most out of your nest egg. Consider keeping at least 12 months of living expenses in an interest-bearing savings or money market account. Then, consider diversifying the rest of your taxable portfolio among different savings and investment options, including those with different maturities to account for fluctuating interest rates. Dividend-paying stocks may also potentially help boost supplemental income.
Finally, remember that many people may live 30 or more years in retirement. Therefore, you may need some stocks to potentially outpace inflation over the years. We can discuss these and other strategies that might be appropriate for you.
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