Even if older workers can find jobs, health risks could prevent them from remaining in the workforce.
, a certified financial planner and founder of Lyon Financial Planning LLC. “This depends on a variety of factors, including your life expectancy and general health, planned spending in retirement, streams of guaranteed income like Social Security and pensions, and other financial resources.”Be prepared to downsize
“It’s critically important to time retirement right because once [workers] hit the ‘off’ switch, they must replace that active income ― a steady paycheck ― with passive income streams,” Kruger said. She noted that money in low-risk investments may not generate enough interest income to support spending levels in retirement.
“Once you have a good understanding of your retirement savings and other income sources, apply the 4% withdrawal rule to your investment assets,” Lewis said. For example, if you have $1,000,000 in retirement assets, multiply that by 0.04 . The result would be $40,000, a good starting point to determine how much you can withdraw from your investments each year to meet your living expenses in retirement.
Rebalancing can reduce your exposure to risk while also eliminating any overlap across your different accounts. For example, you may have several 401s and IRAs that hold index funds or exchange-traded funds that are heavily based in tech stocks. “While tech stocks are the darlings of the market right now, you may have far too much in one particular company and not realize it,” Kruger said. Additionally, you could be paying extra fees to own the very same funds in different accounts.
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