Patrick Cote |

By: Kate Hennessy, CFP®

You have spent the past 30+ years accumulating assets and saving.  But you ask yourself will I have enough money to retire?  How can I continue to create income in retirement?  

Follow these tips to ensure you have the income you need to enjoy your retirement years:

Maximize Social Security

Social security earnings may contribute up to 60%- 80% of your income so maximizing them is essential. You can begin to receive Social security checks at age 62 but if you do so before Full Retirement Age of 67, then you will receive a fraction of what you are entitled to receive.  Every year you wait between your FRA and 70, Social Security will add an additional 8% to your eventual monthly payout.

Spend Safely in Retirement

With a reduced retirement income, you may need to adjust your discretionary spending.  Some financial planners recommend the “4 percent rule.”  The rule states that you should withdraw 4% of your portfolio the first year, then increase it each year to account for inflation.  An alternative method is the “Spend Safely in Retirement” method, which recommends using the annual withdrawal rates based on the IRS required minimum distribution rules. Once you’ve determined your budget and withdrawal rate, be thoughtful about taxes.

Stay Invested

Many retirees are tempted to move their money into “safe” investments.  They fear a market downturn in retirement. How do you determine the right amount of assets you should have invested in the stock market in retirement? At AssetGrade, we use a sophisticated financial planning tool that enables us to use a projected return for our client’s portfolios, manage their risk, and determine their probability of reaching their retirement goals.

In summary, a “paycheck” can be generated in retirement – if you make smart choices and stay invested. Contact us if you have any questions about how to generate income in retirement.