That is a scary question that crosses the minds of more than one retiree.
Back in the day when companies provided "defined pension plan" benefits (just like the "government" at the federal, state and local level still does), retirees could count on a steady "paycheck" once retired.
Oh, that calculus has changed now that almost all private companies have "defined contribution plans" (think 401k and profit-sharing plans).
To make matters more interesting, life expectancies continue to increase as does the cost of health care.
And when is health care most needed?
A recent article from The Motley Fool offers "3 Easy Moves to Make Your Money Last Your Lifetime."
While you will want to click over to the original article yourself, here are the three:
Cut back on your spending.
A great way to be certain your nest egg lasts as long as possible is to decrease your monthly expenses.
A big cost is housing. Pay off your mortgage early, especially before you reach retirement age.
Purchase an "immediate annuity."
With this form of annuity you invest a "lump sum" upfront that in turn pays out in a stream of monthly payments.
In addition, you will need to choose between several payout options depending on how long you want those payments to continue.
For example, if you need more income each month, then you will choose a shorter payout period. On the other hand, if you want the payouts to continue for your entire life, then you will receive smaller payouts.
Converting all of your money to an immediate annuity can be risky.
Once you drop that lump sum into the immediate annuity, then you cannot access that lump sum should you need it. No, you are contractually bound to the upfront payout you selected.
As a result, you will want to keep some liquid funds available if needed for unexpected expenses.
While not very appealing (especially since we are talking about "retirement," right?), you can continue earning income by staying employed.
Say you are planning to retire at 62 or 65. Delaying full retirement for even a few more years can reap big benefits.
Well, you keep saving and investing money for retirement.
In the process you defer drawing from your retirement funds and this allows that principal to continue compounding in a tax-deferred environment.
Delaying retirement can also be beneficial with Social Security.
As you likely know already, the later you start collecting up to age 70, the larger your ultimate checks will be ... for the rest of your life.
For other strategies to put (and keep) a little more gold in your golden years, contact an experienced financial advisor.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: The Motley Fool (April 10, 2016) "3 Easy Moves to Make Your Money Last Your Lifetime"