Planing for Retirement Over 55
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retirement
With the economy and stock market declines all over the news right now, it’s understandable if investors are nervous. And that goes double for those who are over 55 and nearing retirement. But the news is not all bad. As a retirement investor, time is likely still on your side because retirement investing doesn’t end when you retire. In addition, there are actions you can take today to help you get back on track to a more secure retirement.
Determine your expected expenses in retirement. Expenses usually go down once you're retired. Taxes for one and specifically social security and Medicare taxes no longer apply in retirement. There are also no retirement contributions which can be significant if you've been saving aggressively over the years. Everyday expenses such as clothing, food & gas should also go down considerably in retirement. If you're able to manage to pay off your mortgage prior to retirement then you are certainly that much better off in terms of making your retirement savings last.
Consider all sources of income, Social Security is a given for retirees but if you've done a good job of planning for retirement, you should also receive retirement income from your employers 401k plan or pension plan assuming the company your worked for offered this as a benefit to it's employees. If you've managed to contribute to either a traditional or Roth IRA then that would be yet another source of retirement income. All of these sources combined can amount to a substantial income in retirement and may even surpass your income while in the workplace if you've managed to save aggressively over a long period of time.
Figure out available assets. This would be the total amount you have accumulated over the years as an investor. You need to take into account balances in your 401k, pension (if offered) and IRA accounts. You may also consider the equity in your home or any other investment properties you may own. Hopefully you will have accumulated enough retirement assets to provide a substantial supplement to Social Security as that in itself simply does not provide enough to meet your basic needs in most cases.
If you're over 55 and are worried about supporting yourself in your retirement years, a few things you can consider doing to put yourself in a better position financially are:
- Hold annual withdrawals constant for the first five years.
- Cutting back your initial withdrawal amount from what had been planned.
- Consider working a few extra years.
