Make Your Money Last in Retirement
Generally speaking, the average American can expect a much longer and even healthier retirement than previous generations. As a result of significant advances in healthcare and simple, individual lifestyle changes, retirement may last 30 years or more! This is great news for those who plan to enjoy an active retirement. However, as people live longer, they need to ensure that their money will last as long as they do. The bad news is that according to the Social Security Administration, the Social Security trust fund will be depleted in 2040*. The good news is that there are some actions you can take to better your chances of a financially sound retirement.

The following is a list of action items that can help you navigate your retirement:

Don't forget about equities
While conventional wisdom and retirement "rules of thumb" recommend that you become increasingly conservative in your asset allocation as you near and progress through retirement, consider leaving a portion of your nest egg invested in stocks. Stocks and stock funds, although more volatile over short time periods, are still the best way to hedge against inflation over long periods of time (remember the 30-year retirement).

Keep a portion in cash
Once you are retired it is prudent to keep at least 12 months worth of living expenses in cash. This can be accomplished through a money market account or savings account. Having cash available in a liquid account can help you avoid the possibility of having to withdraw from your portfolio when your account values may be down. This flexibility will allow you to preserve your nest egg even longer.

Create a realistic budget
There it is…the "b" word. No one likes it. Some people prefer to call it a spending plan or a resource allocation plan. Whatever you call it, it is important to use one. Financial planners typically recommend clients nearing retirement create a "spending diary" to record expenses over a three- to six-month period to determine where their income is being spent. This allows for a realistic budget to be prepared. While preparing a retirement budget it is also important to consider expenses that may change during retirement. For example, healthcare and travel may increase, while work-related expenses like commuting and clothing may decrease. Like dieting, the more restrictive the program, the less likely you will be successful with it. Regardless of how distasteful it may seem, a budget is still critical to the success of a retirement plan.

Call today to schedule your no-cost, no obligation consultation with a Financial Advisor available through CFS** at SCCU. Please call (321) 752-2222 or (800) 447-7228, ext. 9360.

*Source: www.ssa.gov.

For specific tax advice, please consult a tax professional.

^*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.