Understanding
Financial Planning During the Retirement Years
Here are some ideas to help you make sure that you are
ready in retirement - 60s and beyond.
In our retirement years, we need to be well-prepared.
We no longer have jobs, and we are now living with a fixed
income. This applies whether we have money coming in
monthly or if we are drawing money out of a lump sum in an
investment account.
At age 70 ½, the government begins requiring mandatory
distributions from all tax-deferred retirement accounts,
such as a 401(k) or IRA. There are penalties for not
withdrawing the money, even if we don't feel that we need
to use it. Our custodians can let us know how much is
required to be withdrawn each year.
We should invest retirement money in conservative, and
somewhat stable, vehicles. This is the only way to ensure
that the money will last as long as we do. This does not
mean that we switch all of our money to money markets,
CDs, or bonds. The growth offered by those vehicles will
not be sufficient to keep up with inflation, and we are
very likely to outlive our money.
Nevertheless, we do need to understand, based on the
growth of the funds in the account, how much we can take
out regularly without depleting the account too soon.
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The best way to curb any potential mistakes is to
create a budget. Many people look at budgets as a bad
thing, but a budget is the key to maximizing your income.
This is also a great time to review all insurance to
make sure that we are covered in every area.
Before retiring, we should find out what type of
medical coverage we will have upon termination of our
employment. Some employers offer full medical coverage
after an employee works a certain number of years. Some
people retire just short of the time they needed to get
full medical benefits in retirement.
If our employer's plan does not offer full coverage, we
should find out what we need to do to get supplemental
coverage.
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Now is also the time to look into long term care
insurance. There is a high possibility of needing long
term care at some point during our lifetime. As health
care costs continue to increase, the out-of-pocket cost of
long term care can greatly reduce any retirement savings
we've accumulated.
There are several options available in a long term care
insurance policy. We should review the options and choose
what works best for our family.
We should also update all estate planning documents.
These include our living trust, advance health care
directive and power of attorney.
Someone should be assigned to handle our affairs in the
event that we are incapable of doing so. If we don't take
care of this critical issue, the courts can assign someone
to handle it for us.
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Ozeme J. Bonnette is a financial coach, speaker, and
author of Get What Belongs to You: A Christian Guide to
Managing Your Finances. Her focus is on increasing
financial literacy among adults and youth around the
U.S. She earned 3 Bachelor's degrees at Fresno State,
and her MBA at UCLA's Anderson School. Her blog is http://www.povertynorriches.com.
Reach her at ozeme@thechristianmoneycoach.com.
Article Source: http://EzineArticles.com/?expert=Ozeme_J_Bonnette
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