How To Manage Retirement Savings

Retirement savings must be actively managed to ensure you have enough money to live comfortably for the remainder of your days.  While most people assume once you hit retirement age, that all of your work is behind you, anyone who is embarking on their golden years or who have a few years under there belt will tell you otherwise.  Work in the traditional sense may be a thing of the past, but there is still plenty of work that has to be done when it comes to managing your personal finances and savings.  Here we look at some tips you can use in your savings strategies to help prepare so that you have the money you need, when you need it.

  • Financial advisorHiring a professional is not a necessity, however if you have find it too time consuming or too complicated to manage your finances on your own, you may benefit from a trusted financial advisor or planner.  This person must understand your unique needs as well as your future goals and offer a strategy that will help you reach those goals.  Even with a reliable planner on your side, you should still remain on top of your finances and continue to make the final decisions that are in your best interest.  Editor’s Note: Here are some reasons that would want to fire your financial advisor.
  • Asset allocation-  For most of your working life you have probably used a savings strategy the allowed for maximum growth.  These strategies typically involve a bit more risk than you want to assume once you reach retirement.  This does not mean you have to move all of your assets to one safe location, however you should diversify in a way that puts an emphasis on securing the money you already have. Consider putting more of your money in low risk areas such as savings accounts and CD’s which are relatively liquid and offer little risk.  You can view and compare the rates and benefits of many accounts online making it easier to find the savings accounts and other savings tools that will benefit you the most.  Consider high-yield reward checking accounts and high interest savings accounts that will offer some opportunity for growth while keeping your assets close at hand.
  • Pay off debt-  If you have carried debt into your retirement years, you want to pay off debt as quickly as possible to eliminate financial obligations which may be eating away at your savings.  This is especially true for high-interest debt such as credit cards.
  • Minimize tax consequences-  It is important to understand how retirement savings are taxed and the penalties of not distributing retirement plan savings in a timely manner.  Pay attention to the rules and requirements for qualified distributions of IRA and 401k accounts to ensure you are not handing more money over to Uncle Sam than necessary.

The golden years are supposed to be a time of rest, relaxation and living life to the fullest with those you love.  If you make the right choices in how you manage your savings at this time of your life, you can have a plan for your remaining years.

This is a guest post by Debbie who writes for the site DepositAccounts.com which looks to educate consumers on all things concerning savings accounts.  Debbie is not endorsed or affiliated with LPL Financial.

  • Asset Allocation does not ensure a profit or protect against a loss.  There is no guarantee that a diversified portfolio will enhance overall returns or outperform non-diversified portfolio.  Diversification does not ensure against market risk.
  • CD’s are FDIC Insured and offer a fixed rate of return if held to maturity.

Creative Commons License photo credit: Darrren Hester

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