5 Ways to Avoid Outliving Your Retirement Savings

socialsecurityYour Social Security Income

Social Security benefits are designed to be distributed out to you for your lifetime. It is also calculated based on current factors including inflation that can affect your spending. If you are eligible to receive Social Security upon retirement, you can be assured some income for as long as you live.

To ensure these distributions can help you live worry-free, you should check to make sure you’ve invested at least 35 years of time for full-earning potential. You should also wait to collect your benefits until at least the age of 70. Both strategies will help you secure the highest amount of benefit allowance you can receive.
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savingsResponsible Savings Withdrawals

It will be important to remain committed to responsible withdrawals from your various retirement accounts during the course of your retirement. Professional retirement planners often suggest limiting savings withdrawals to just 4 percent of your total savings amount on an annual basis.

This can protect you financially if any of your other portfolio holdings fail you. You’ll be assured a cushion in the event of emergencies and you can be comforted knowing you’ll leave some of your money behind for loved ones.

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mortgagePlan for Pre-Retirement Mortgage Elimination

One of the costliest expenses one has to deal with is their mortgage each month. By having a plan to eliminate your mortgage debt prior to your retirement, you can significantly lower your financial responsibilities and free up more money for other purposes.

In addition to removing the expense from your debt load, you will have some security in the equity of your home should financial emergencies arise where an additional mortgage could serve a purpose. Paying off a mortgage in full will require advanced planning and cost-cutting in the years prior to retirement. Making extra payments each month can go a long way to speeding up your payoff ability.

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pensionUnderstanding Your Pension

For those employed in companies that offer pensions, it will be important to understand how your pension will work throughout your retirement. Most retirees will consider their pensions as a second source for monthly income. You must have a plan for making the most out of your pension; otherwise you may spend it too quickly and be left without that backup income.

If you’re offered a one-time pension payout and opt to take it, make sure the cash you take is invested in a way that will benefit you.

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dollarGain Interest on Annuities

Annuities are not the way to go for everyone due to high fees often associated with the service. However, they can have income potential on some level for retirees. Annuities involve having an insurance company handle a portion of your retirement savings.

The insurance company will then guarantee monthly payments to you for your lifetime, provided the insurance company remains in business. Even if you live a very long time or if the stock market is not performing well, you will continue to earn an income.

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