Making Your Money Last

Simple Strategy to Spend Safely in Retirement

Delaying Social Security and using RMD rules to draw down your nest egg is a winning combination for middle-income retirees.

Retirement-income strategies are big business. Financial advisers and online advice services will help you transform your savings into a steady retirement paycheck—for a fee. Some mutual funds also promise to deliver a stream of retirement income—for a fee. And all manner of annuities will guarantee you lifetime income—for fees, fees and more fees. But what if the best retirement-income strategy didn’t require you to pay anyone for advice or fancy financial products, and you could actually implement it yourself while channel-surfing and ordering pizza?

Vernon acknowledges, however, that most people won’t feel comfortable with 100% in stocks. A target-date fund that automatically adjusts its investment mix as you age or a balanced fund with 40% to 60% in stocks, he says, “could be a good compromise.” Spend Safely isn’t set in stone, Vernon says. If you can only wait until 67 or 68 to take Social Security, “you still get a lot of benefit,” he says.

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