Current:Home > NewsWorried about retirement funds running dry? Here are 3 moves worth making.-DB Wealth Institute B2 Expert Reviews
Worried about retirement funds running dry? Here are 3 moves worth making.
View Date:2024-12-24 00:01:45
Running out of money has long been a major fear among retirees. And the sad reality is that it doesn't matter if you're closing out your career with $400,000 in savings or $4 million.
No matter how much money you have, you may find yourself overcome with panic every time you take a withdrawal from your IRA or 401(k) plan. But if you make these important moves, you might lower the likelihood of completely depleting your savings in your lifetime.
1. Establish a safe withdrawal rate
Tapping your IRA or 401(k) whenever you want money could put you at risk of depleting those funds sooner than expected. So rather than take your withdrawals at random, have a plan.
Sit down with a financial advisor and figure out a safe withdrawal rate based on factors that include your savings balance, your investment mix, and your life expectancy. Obviously, you can't predict how long you'll live with complete accuracy. But you can make educated assumptions based on the state of your health, as well as your family history.
From there, figure out a withdrawal rate that makes sense and set a schedule so you know exactly when you're supposed to tap your nest egg. Granted, you could work with an advisor to take withdrawals at a time when it makes sense from a market perspective, but that could get a bit complicated. So you may be better off setting a schedule from the start.
2. Delay your Social Security filing
You're entitled to your complete Social Security benefit, based on your personal wage history, once you reach full retirement age (FRA), an age that hinges on your year of birth. But if you delay your filing past FRA, you can give your monthly benefit a boost of 8% per year if you hold off on claiming it, up until age 70.
Having more money coming in from Social Security won't automatically guarantee that your savings won't run out. But think about it this way: Let's say you're able to boost a $2,000 monthly Social Security benefit to $2,320 by delaying your claim by two years beyond FRA. If you have an extra $3,840 coming in per year, that's $3,840 you won't have to take out of savings. It's that simple.
3. Consider an annuity
An annuity is a contract you sign with an insurance company that has you putting down money in exchange for a series of payments. Some annuities will guarantee regular payments for the rest of your life, so that's one way to help ensure that you won't end up completely without an income if your savings start to dwindle.
However, annuities have their drawbacks. They can be expensive to put into place from a fee standpoint, and many are designed to pay recipients a fixed amount throughout retirement, regardless of inflation.
Social Security, by contrast, is at least set up to adjust for rising living costs. But still, it's an option worth considering if the thought of running out of money is keeping you up at night.
After a lifetime of hard work, you don't deserve to struggle financially in retirement. If you're worried about depleting your savings and encountering that very fate, take these steps to avoid that scenario.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
Offer from the Motley Fool:The $21,756 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $21,756 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
veryGood! (46352)
Related
- Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Something Corporate
- A thrift store shopper snags lost N.C. Wyeth painting worth up to $250,000 for just $4
- Burning Man exodus: Hours-long traffic jam stalls festival-goers finally able to leave
- 23 people injured after driver crashes car into Denny’s restaurant in Texas
- Cruel Intentions' Brooke Lena Johnson Teases the Biggest Differences Between the Show and the 1999 Film
- Clemson football, Dabo Swinney take it on chin at Duke. Now they must salvage a season.
- USA dominates Italy at FIBA World Cup, advances to semifinals
- Minnesota prison put on lockdown after about 100 inmates refuse to return to their cells
- Horoscopes Today, November 13, 2024
- Pickup careens over ramp wall onto Georgia interstate, killing 5 teens, injuring 3 others
Ranking
- RHOBH's Kyle Richards Addresses PK Kemsley Cheating Rumors in the Best Way Possible
- Nonprofits Candid and Council on Foundations make a rare deal the way corporations do
- Nonprofits Candid and Council on Foundations make a rare deal the way corporations do
- Dozens injured after Eritrean government supporters, opponents clash at protest in Israel
- How Leonardo DiCaprio Celebrated His 50th Birthday
- Minnesota political reporter Gene Lahammer dies at 90
- Person trapped at the bottom of 100-foot California ravine rescued after 5 days
- A Medical Toolkit for Climate Resiliency Is Built on the Latest Epidemiology and ER Best Practices
Recommendation
-
New Orleans marks with parade the 64th anniversary of 4 little girls integrating city schools
-
Lili Reinhart and Sydney Sweeney Prove There's No Bad Blood After Viral Red Carpet Moment
-
Why Miley Cyrus Say She Didn’t Make Any Money From Her Bangerz Tour
-
Alex Murdaugh's lawyers accuse court clerk of jury tampering and demand new trial
-
Kelly Rowland and Nelly Reunite for Iconic Performance of Dilemma 2 Decades Later
-
Alabama football reciprocates, will put Texas fans, band in upper deck at Bryant-Denny
-
Massachusetts teen dies after 'One Chip Challenge,' social media fad involving spicy food
-
Steve Harwell, former Smash Mouth frontman, dies at 56, representative says