NDSU Extension Service - Ramsey County


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Making Retirement Dollars Last

Making Retirement Dollars Last


An ongoing challenge for retirees is making sure your money will last the rest of your life. We can only estimate how many years we will live and then attempt to manage our finances so our savings will last for that unknown number of years. How to manage those retirement dollars?  Consider:


Boost Your Social Security. Common strategies for boosting your Social Security payments include making sure you have at least 35 years of covered earnings, claiming spousal payments, and delaying claiming up until age 70. You can find your online Social Security statement  at www.ssa.gov/myaccount/


Have a System for Withdrawals:  Many financial advisers recommend withdrawing no more than about 3 or 4 percent of your retirement savings, perhaps adjusted for inflation, each year.  With a systematic withdrawal scheme, if you live a long time or have a poor investment experience, you lessen the risk of running out of money.


Pay off the mortgage. For most people, your mortgage is one of your largest monthly bills. Eliminating this large expense gives you more flexibility for your budgeting. Plus the equity in your home could also be tapped for extreme emergencies, via a second mortgage or reverse mortgage.


Evaluate Long-Term Care Insurance.  Some financial experts recommend that retirees consider long-term-care insurance as a hedge against the future cost of nursing-home care, which has the potential to use up even hefty nest eggs.  A recent health survey showed that 70% of people over age 65 have some type of health problem that would require form of long-term care. Yet, long-term care insurance itself is a big expense.  Talk to a health care-insurance professional to determine what would and would not fit your situation.


Plan for taxes.  The tax bite on withdrawals from retirement funds can be daunting.  There is a required minimum distributions that most retirees have to start taking at age 70½.  Some retirees begin taking withdrawals in their 60’s to reduce the total balance and thus the required minimum distributions later on.


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