Running out of money in retirement is the unthinkable, the boogey man in the closet.  What are your ‘best bets’ for making your money last?  If this is truly your top priority, consider these the new goalposts:

1.   Work until age 70

There is an exponential positive effect when you decrease the number of withdrawal years and increase the years that you are saving.

 2.   Take Social Security Benefits at age 70

A person’s age 70 benefit can be as much as 75% higher than his/her age 62 benefit.  Keep in mind that, for widows, divorcees and two-income couples, the decision is not straightforward.  Some little known opportunities exist.  Finding the optimal benefit configuration is a job for your financial planner.

3.   Begin RMD’s at age 72

Start taking the ‘Required Minimum Distribution’ from your pre-tax accounts in the year that you turn age 72 and never take more than the minimum amount required.  Keep at least a portion of your nest egg in something with a stable value so that you do not have to withdraw from accounts that have lost value.

4.   Fund Roth Accounts and Health Savings Accounts (HSA’s)

Fund Roth Accounts and Health Savings Accounts, if eligible, while you are working so that you will have tax-free money to spend after retirement (at least that is how it works under current tax law).  Roth accounts make ideal savings vehicles for lump-sum retirement purchases like new cars.  Health Savings Accounts can be used to pay health insurance premiums, deductibles and co-pays, long-term care premiums, dental, vision and chiropractic costs, durable medical equipment costs and other out-of-pocket medical expenses.  Tax laws can change.  As with all tax matters, be sure to consult with your tax professional.

5.   Cover Potentially Catastrophic Risks

Be sure to have an Umbrella contract that includes Uninsured Motorist and Underinsured Motorist provisions.  Cover long-term care risks using either traditional LTC insurance, life insurance or annuities that have LTC benefit riders (hybrid products), or by some other means.  Work with your insurance professionals to make sure that all significant risk exposures are covered.


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