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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Monday, July 03, 2006

Investing During Retirement

Investing during retirement is different than investing for retirement. When you retire your investment objectives change to generating income and have enough money to live the rest of your life.

Some things to consider:

· How much can I safely withdraw?

· How can I make my retirement money last until death?

· How do I handle inflation?

· How do I transfer money to my heirs efficiently?

Some potential problem issues to consider:

· Fixed dollar withdrawal programs increase your risk and becomes a serious problem if a market decline.

· You might live until your 90s or older; how can you be ready for that financially?

· Inflation will never completely disappear so expect it.

· Taxes are a retiree's worst problem for returns.

· You have to be prepared to watch your spending carefully.

· At age 70 ½ you must deplete your retirement accounts: how do you handle the influx of money?

If you plan accordingly, you will feel safer about your retirement. With no plan you can lose control of the situation during retirement because there are some many factors that there is no way to control. There is no comprehensive plan to follow; you must assess your situation individually so consider these factors and more when investing during your retirement.


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