I’m Thinking About Retiring. Now What?

Figuring out how to live off your retirement savings is as much a personal issue as it is a financial decision. You have to develop a strategy that will allow you to enjoy your retirement while helping to reduce the stress in worrying if you have enough. The best step is to do your homework so you're prepared for this important transition in life.

In a survey conducted in 2004 by Brightwork Partners LLC many retirees were surprised to discover that they had lower incomes and higher expenses than previously anticipated. Almost half of those surveyed stated that their quality of life in retirement had since declined. Their biggest regrets were that they wished they had begun saving earlier in life and had been saving substantially more.

Spend Wisely

Americans are living longer and retiring earlier, the number of years spent in retirement is also increasing. According to the American Association for Retired Persons (AARP) people often spend more in retirement than expected. Develop a budget for your expenses, and stick to it.

Planning carefully, investing wisely and spending thoughtfully, will help increase the likelihood that your retirement will be a financially secure one.

Distribution Options

Make sure you are aware of the distribution options available from your retirement accounts. Generally most 401(k) plans do not offer distributions in the form of annuity payments. Annuity payments allow you to withdrawal funds slowly over a long period of time so that you can conserve the principal balance. IRAs typically offer more distribution options, and allow you to consolidate assets. Consider if rolling over assets to a Traditional IRA is right for you.

Social Security

No matter what your full retirement age is, you may be eligible for benefits as early as age 62. However, if you start at an early age, your benefits are reduced a fraction of a percent for each month before your full retirement age.

The advantage is that you collect benefits for a longer period of time. The disadvantage is that your benefit is permanently reduced. Conversely, if you delay retirement, you can increase your Social Security retirement benefit.

Part Time Employment

Consider looking for part time employment.
Not only would it provide an additional source of income but it may help ease the difficult transition into retirement.

According to AARP, 60% of retirees named the need for money as the primary reason for working beyond retirement. Over 50% named the need for healthcare.

Who Can Help Me?

SCCU has a staff of investment advisors available through CFS^*, to help you with your financial service needs. You can select the level of professional fund management you want, whether it be an initial consultation and periodic reviews of your investments, or a more hands-on approach by one of the advisors. Call us for a no-cost, no obligation consultation at (321) 752-2222 or (800) 447-7228, ext. 9360. Or, email your questions or comments to: Invest@sccu.com.

^*For tax advice, consult a qualified tax professional.
Products and services offered through CUSO Financial Services, L.P., are not NCUA or NCUSIF insured, not credit union guaranteed, and may lose value. Financial advisors are employees of Space Coast Credit Union and registered representatives of CFS. Space Coast Credit Union is in partnership with CFS. (Member FINRA/SIPC).

The information on this page is for educational purposes only. SCCU is not engaged in providing estate planning or other advice. Please consult with a competent estate planning professional regarding any specific estate planning questions.