One thing that keeps seniors and early retirees up at night is wondering whether their assets will last throughout their retirement. There are several reasons why your nest egg might run out: maybe you were unable to save enough during your working years, your investments suffer losses in the financial markets, or you are faced with unexpected medical expenses. Whatever the case is, many seniors face the problem of running out of money during their Golden Years. So, what are some of the ways that retired seniors, as well as people approaching retirement, can make their assets last? Here are three strategies that Brandon elder lawyers often suggest:
- Adapt to your situations
You should avoid withdrawing a set amount of money annually and instead stay agile and able to adapt to changing financial circumstances. Keep in mind that what worked one year may not necessarily work the next year or the year after that during your retirement. You should consult with a financial professional to determine your goals for each year of your retirement and how you can best achieve those goals with your retirement assets.
- Break the 4% rule
One of the old school methods of retirement spending is the 4% rule. This rule states that seniors should only spend 4% of their portfolio annually so that the assets will last approximately thirty years. However, this approach is flawed because it does not take into account any negative changes that a poor economy or stock market crash can have on your portfolio. It also does not consider your own personal goals for how you want to spend your retirement. For example, a senior at the start of retirement is healthy enough to enjoy an active lifestyle, which is much different from a senior who is nearing the end-of-life. A younger, healthier retiree who follows the 4% rule could miss out on doing the things they want to do while they’re still able and may end up regretting missed opportunities when they’re older.
- Reach full retirement age before taking Social Security
You’ll get your full Social Security benefit if you wait to receive Social Security until you’ve reached the full retirement age. If possible, you can also delay even longer to receive more money. If you wait until you reach age 70, you could receive up to 35% more than the full benefit. In contrast, you will receive significantly less money from Social Security if you start taking payments at age 62. It’s advised that you speak with an elder law attorney to discuss your financial situation and determine how long you can wait before you start receiving Social Security benefits.
If you have any additional questions about how to make your assets last throughout retirement or how to create plans that will sure your assets are protected as you age, please contact our Brandon elder lawyers at (813) 438-8503 to set up a consultation.