Many people worry that they’ll outlive their retirement savings. If that happens, their later years could end up incredibly difficult, which isn’t ideal. Luckily, there are things you can do to make sure your retirement savings will last. If you want to make sure you don’t outlive your retirement account, here’s what you need to do.
1. Do Some Math
During the early days of your retirement, your nest eggs might look massive. The thing is that money has to last a long time, potentially several decades. Don’t let the initial number trick you into pulling too much.
If you aren’t sure how much to withdraw each year, take advantage of several online retirement calculators. Be somewhat conservative when it comes to interest earnings or other investment returns, and see what the various results say. This can help you estimate how much you can safely withdraw, giving you a starting point for planning.
2. Tackle Your Debt
The less money you have going out, the more you can use to support your retirement lifestyle. Before you leave the workforce, tackle as much of your debt as possible, particularly high-interest debts.
By getting rid of debt, you’re reducing the obligations you have to handle in your budget. Getting rid of even one $100 payment makes a difference, potentially reducing how much income you’ll need by $1,200 a year.
3. Try Part-Time
There’s nothing that says you can’t work some during your golden years. If you’re worried your savings won’t last, don’t rely on it solely in the beginning. Instead, consider finding a part-time second career that you enjoy. It may let you delay pulling Social Security (giving you a higher payment), limit your 401(k) or IRA withdrawals, or even keep saving.
4. Plan for Your Healthcare Needs
As people age, their healthcare needs usually rise. Medical expenses, particularly if you need long-term care, add up.
Along with allocating some of your savings specifically to medical costs, research long-term care insurance policies well before you need one. That way, you can plan for financially challenging situations, ensuring you’ll be able to cover them.
5. Consider an Annuity
If you’re looking for some stability, you may want to purchase an annuity as part of your retirement plan. If you couple one with Social Security and some traditional retirement savings approaches, it may be enough to cover you long-term while making your income predictable.
With an annuity, you can receive a set monthly payment for the rest of your life, so it isn’t possible to outlive your retirement if you go this route. That’s a solid bit of financial security, as you’ll have a specific amount of income that you can rely on indefinitely.
Do you have any other tips that can help someone ensure they don’t outlive their retirement? Share your thoughts in the comments below.
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