A key element of managing wealth is setting the stage for an enjoyable retirement. Here are eight rules we recommend to ensure success during the Golden Years:
- Limit distributions from your retirement savings to a “safe” amount, say between 3% and 4%, depending on the makeup of your portfolio.
- Stay flexible in your spending, so that when the value of your portfolio declines, you can live on less.
- Invest in the stock market. This is the only way you can keep up with inflation on a long-term basis.
- Don’t be afraid to spend principal. Unless your retirement goal is to leave money to your heirs, you should feel comfortable using both income and principal to support your lifestyle.
- Put off claiming Social Security. Assuming the financial worst-case scenario, in which you live a long time, waiting until full retirement age or later can result in higher income overall.
- Get a job. The extra income will help – and being engaged in something other than leisure activities can be good for your physical and mental well-being.
- Consider buying a guaranteed lifetime stream of income. If you’re not already eligible for a private or public pension, an immediate fixed annuity can increase the chances that your money will outlive you.
- Stay healthy. Diet, exercise, keeping active mentally, avoiding risky activities and using moderation in all you do will help you to maintain good health.