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Your Financial Life
By Catherine Collinson / Jul 27, 2016

You’re Retiring and Your Nest Egg is Ready to Hatch, Now What?

nestegg Every day, 10,000 Baby Boomers turn 65. A recent survey of workers by nonprofit Transamerica Center for Retirement Studies® found that most American workers do not have a well-developed financial plan or strategy when they retire and few have a written strategy. Ironically, so much emphasis is placed on long-term saving and investing during our working years, not enough attention is given to what we’re going to do with our nest eggs when we retire. What are some things people should be taking into consideration? A starting point is calculating retirement income needs relative to expected sources of income and living expenses. Ask yourself: what are all of my expected sources of retirement income? If applicable, be sure to include Social Security, employer-sponsored retirement benefits, retirement accounts, other savings and investments, any other assets – and even the possibility of working at least part-time. Then start preparing your retirement budget which includes living expenses, health care costs, and potential long-term care expenses. It’s important to lay the groundwork – and it may feel like gruntwork but it’s not. Just remember, it’s your retirement, it’s the next 20, 30, 40 or more years of your life and planning can make a difference. Also ask yourself whether you’ve saved enough to meet your lifetime retirement income needs. And are there ways that you can invest, accoording to your risk tolerance, that can help your savings grow even as you’re taking withdrawals. A professional financial advisor can help with this. What about taxes and taxation? Consider this: many Americans have both tax-deferred savings in a 401(k) or similar plan or traditional IRA – and after-tax savings in various forms of savings and investment accounts. Deciding when and how much to draw down from these accounts can have significant tax implications – and, of course, the goal should be to optimize withdrawals in a way that can minimize taxes over time. A professional financial advisor or CPA can help with this. Are there any rules of thumb? A major rule of thumb is to map out a strategy and have a plan. Financial planning is very personal and depends on your facts and circumstances. Another factor to consider is when to start claiming Social Security – which can have an affect on the monthly benefits you receive, as well as bring tax implications. While getting a plan in place may seem like a lot of work, it can help you make the most of your hard-earned savings and, hopefully, enjoy your retirement a little bit more. For more tips and information, visit www.transamericacenter.org. To listen to the podcast, please click here.   Catherine Collinson serves as president of Transamerica Institute® and Transamerica Center for Retirement Studies® , and is a retirement and market trends expert and champion for Americans who are at risk of not achieving a financially secure retirement. Catherine oversees all research, publications and outreach initiatives, including the Annual Transamerica Retirement Survey. She also serves as the executive director of Aegon Center for Longevity and Retirement. Transamerica Institute® is a nonprofit, private foundation dedicated to identifying, researching and educating the public about retirement, health coverage, and other relevant financial issues facing Americans today. Transamerica Institute comprises two divisions: Transamerica Center for Retirement Studies® and Transamerica Center for Health Studies® . Transamerica Institute is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third parties. For more information about the Institute, please refer to www.transamericainstitute.org. Transamerica and its agents and representatives do not provide tax or legal advice.  This material is for informational purposes and should not be construed as legal or tax advice.  For legal or tax advice concerning your situation, please consult your attorney or professional tax advisor.   TANEH0716