One fear many future retirees have is running out of money. A spend safely retirement strategy can help alleviate those fears by ensuring you have a plan for your finances. Here are the five components to know.
Delay Starting Social Security
You can maximize the value of your social security benefits by waiting to start them until at least your full retirement age. The longer you wait to begin, the greater your monthly benefit will be.
Plan All Withdrawals from Savings
Financial experts recommend that your retirement savings be invested in plans like low-cost mutual funds, target date funds, or index funds. At age 72, minimum distribution (RMD) withdrawals happen annually. Know the minimum percentages and plan accordingly.
Consider All Expenses
Once you've determined your income from savings and retirement, it is important to consider your expenses. Make a list of your current monthly payments and factor in any changes you anticipate in health insurance costs, lifestyle changes, etc. This helps you develop a realistic budget.
Fill Income Gaps
Next, you'll need to find ways to fill in any income gaps based on the information you've already gathered. Consider approaches like part-time employment, tapping into your home's equity, or even delaying when you retire.
Determine Additional Assets
If you are lucky enough to have other assets - like a second home or a valuable art collection—you may want to consider selling them and using the proceeds to supplement your retirement income. This step in the spend safely retirement strategy is where you can tailor your plan to your unique circumstances.
Following these five steps will help ensure you have a solid plan for your retirement finances. Then you can relax and know you have taken the steps needed to enjoy your golden years.