Senior woman on bike ride

Tips to Protect Retirement Income

With Americans living longer, healthcare costs rising, and many people beginning to save later in life, it’s possible to enter retirement unprepared. If you’re currently saving or planning to retire in the near future, here are some tips to help you get and stay on track.

Diversify Your Investments

Some financial investments will perform better than others and it can be difficult or impossible to predict how an individual investment will fare over the long term. That’s why it’s important to diversify.

Having a mix of assets in your portfolio can increase the likelihood that your money will grow in the long run and help shield you from the impact of an economic downturn. Of course, it’s impossible to completely insulate yourself from risk, but diversification may provide a greater measure of security than putting all of your retirement savings into one investment type or objective.

Plan to Live a Long Time after You Retire

It’s common for retirees to live well into their 80s or 90s. That means that your retirement savings may have to last for 20 or 30 years. You will have to plan accordingly to make sure that you don’t run out of money.

Factor healthcare costs into your retirement planning. As people age, they tend to require medication, as well as in-home assistance or care in a nursing home or assisted living facility. You may want to think about purchasing a long-term care insurance policy, or educate yourself about other protective strategies so you won’t have to drain your retirement account to cover those expenses.

Think about Inflation

Inflation gradually decreases the purchasing power of money. Each year that you’re retired, your cost of living will likely increase, but your savings may not grow enough to keep pace. Some types of investments, such as stocks, commodities, real estate securities, and Treasury inflation-protected securities (TIPS) may help your retirement savings keep pace with inflation so you don’t run out of money as the years go by.

Be Strict When It Comes to Withdrawals

You may accumulate a sizable nest egg by the time you retire and may be tempted to make a major purchase, such as a new car, or take a long and expensive vacation. It’s important to be disciplined when withdrawing money from your retirement account. The fact is, you don’t know how long you’ll live or whether you’ll need expensive healthcare in the future. If you withdraw too much money early in your retirement, you may come to regret it later.

Get Professional Help to Plan for Retirement

Toomey Investment Management, Inc. can work with you to develop a diversified investment portfolio to attempt to optimize performance and minimize risk. Our team can develop an integrated plan that also considers insurance and taxes. Contact us today to learn more.