Real Estate
Author
Ameriprise Financial
Title
Avoiding risks to your retirement income
Created
Monday, Jan. 22, 2007
Link
http://www.ameriprise.com/amp/individual/insights-resources/wp-230997.asp
Content
Avoiding risks to your retirement income Having a plan to secure a comfortable retirement and making the right financial choices can help ensure your retirement income lasts. The risk of outliving your savings is greater than ever, thanks to factors such as longer life expectancies and the diminishing role of pensions and Social Security. According to the Society of Actuaries' 2000 Mortality Tables, 82% of couples who are age 65 can expect to live until age 85; 60% to age 90 and 33% to age 95. By having a plan to secure a comfortable retirement and making the right financial choices, you can help ensure your retirement income lasts. Key points about ensuring your income in retirement: Planning ahead for your lifestyle — and your lifespan — can help your money last over the course of your lifetime It's important to balance your mix of stocks and bonds based on your goals and risk tolerance A prudent withdrawal rate over the long term is 4% to 5%, adjusted for inflation each year A focused asset allocation strategy can help you develop a steady income stream during your retirement years Planning ahead for your lifestyle — and your lifespan — can help your money last over the course of your lifetime "The biggest risk that future retirees face is running out of money — and losing financial independence," says Craig Brimhall, vice president of retirement wealth strategies for Ameriprise Financial. "You've got to plan ahead so your money lasts as long as you do." Given the potential for a lengthy retirement, it's important to keep your savings growing rapidly enough to at least keep pace with inflation and help protect against its negative effects on your purchasing power.
