Are you nearing retirement? Wondering how to make sure you won’t run out of money during your old age?
The simplest recommendation is most likely the idea of waiting until you’re 70 to claim Social Security and then use the IRS’ required minimum distribution table to know how much you could withdraw from your savings each and every year. Based on information provided by a research scholar from Stanford Center on Longevity, this might be the best approach for people who have saved anywhere between $100 000 and $1 million.
The traditional way has long been that you should withdraw 4 percent of your retirement savings in the first year and increase the amount yearly depending on rate of inflation.
Some people try not to use the money at all, using it only as an emergency fund and some people do pretty much the opposite, using their retirement funds as a checking account. Neither of these versions are too reasonable.
Whether this recommendation is the way to go for you, we can’t really say. It could be great but we couldn’t give you a definitive answer. However, it is definitely reasonable to make a retirement plan and think through it all logically. That’s the very minimum all of us should be doing, independent of the age. Financial planning is important to make sure you don’t run out of money too soon, or to make sure you had any in the first place.
Working during your first theoretical retirement years is also a good idea, especially for some people who are used to and still capable of being active, for them to keep doing some work is the best idea. Not just because of money, but just to keep themselves active. For other people, like me, can i buy powerball tickets online might be the first question that comes to my mind when I start thinking about financial planning. Meaning, I would usually just think about anything else than planning and money and hope to get lucky.