Wesley Woods of Newnan: We Believe in Managing Your Retirement Budget

We believe … In managing your retirement budget. With proper planning, you may have more cash for your golden years.

A recent survey by Ameriprise Financial found that 68 percent of retirees with at least $100,000 in assets have not yet taken money out of their savings. In most cases they’ve not withdrawn more than the IRS’ required minimum distributions from their retirement accounts. It turns out that the transition from saving money to living off of those assets is much tougher for seniors to navigate than many realized.

Here are four tips for tapping that nest egg and making the most of your retirement years:

1. Many people do a good job of tracking their spending in their preretirement years and establishing projections for what they anticipate they will spend in retirement, but it’s important to revisit those estimates and use your actual expenditures to fine-tune your average monthly expenses. This will give you a more precise handle on your spending needs and identify areas where you can reduce spending.

2. A common approach to the asset withdrawal phase of retirement is a “bucket strategy,” which involves breaking your nest egg into three buckets: (1) The Cash Bucket (one to three years of short-term income); (2) The Income Bucket (five to eight years of medium-term income); and (3) The Growth Bucket (10+ years of long-term income). As each of the first two buckets gets low on dollars, you replenish them with assets from the others, helping achieve stability in your cash flow.

3. In addition to savings and retirement accounts, you may be able to unlock value from assets that you didn’t consider. For example, many seniors are surprised to learn that one potential asset for generating immediate cash is a life insurance policy. When you sell a policy—something called a “life settlement” transaction—you get a cash payment and the purchaser assumes all future premium payments, then receives the death benefit.

4. Remember, it’s your retirement; pay yourself first. Financial advisers often recommend that you keep a cash backstop of 12-18 months’ worth of living expenses. This will help cover unexpected costs and provide you with some reassurance that you can weather a sudden big-ticket item.

Wesley Woods of Newnan is located at 2280 Hwy. 29 North in Newnan, GA 30265. Visit their website at: wesleywoodsnewnan.org.