If you're reading this and you have already (or are about to) retire - congratulations, you made it! Hopefully you've been planning for this time for years and you have all your ducks in a row for this new chapter in your life. With that being said, even if you have everything already figured out, there are some things to consider and decisions to make now that you are actually retired, like making the most out of your Social Security:
5 Things You Can Do When Your Retirement Savings Just Isn’t Enough
Now that you've learned the ins and outs of how to make the most out of your Social Security income in retirement, let's take a look at some other ways to manage your money:
4 Tips To Help You Manage Your Finances Once You Are Retired
1. Wait As Long As You Can To Withdraw Money From Your Retirement Savings Accounts
When it comes to tapping into your retirement savings plans - wait as long as you possibly can. Taking money out of your retirement savings accounts early can have significant tax impacts1 and withdrawal penalties. Whether you have a 401(k) account (or two, if your spouse has one), a Traditional Individual Retirement Account (IRA), a Roth IRA, or other savings vehicles, it's important to know the tax restrictions on withdrawing from your retirement accounts.
- 401(k): you have to start withdrawing at age 70 ½. Best to wait until at least age 59 1/2, to avoid the 10% early withdrawal penalty.
- IRA: if you try to take money out before you reach age 59 1/2, that is known as an "early distribution," and you'll probably have to pay a 10% penalty fee.
2. Stretch Your Money As Far As You Can
You made it this far and that's no small thing! Now it's time to make sure you make the most of your money during retirement. You want to be confident that your money will last, right? The key to this is budgeting! Creating a budget and sticking to it will ensure that you aren't going beyond your spending limits. This is critical during retirement, especially if you don't have supplemental income coming in.
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3. Bring In Supplemental Income
Sure, you have your nest egg of retirement savings, but wouldn't it be nice to bring in some extra cash for discretionary spending? Maybe there's an extra trip you want to take. Maybe there's a new home renovation you want to complete but didn't plan for. Whatever it is that you want to do, your supplemental income can help you make it happen! Here's some ways to bring in some extra money during retirement:
- Freelance tutoring
- Pet sitting
- Work at a National Park
- Be a local tour guide
4. Keep Planning
Hitting retirement is a huge financial milestone, however it doesn't mean that the planning stops there. Think of continuing to invest time in planning your finances during retirement the same way you would invest in healthcare. You wouldn't miss going to your routine checkups, would you? Same thing should go for your financial checkups during retirement.
It's Time For A Financial Checkup!
Coastal members can connect with a CFS* Financial Advisor to schedule your free retirement plan review. We can assess your current retirement income strategies to see if you are on track to maintaining your current retirement goals.
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