der G@mericans (NAPSA)—A recent survey by Ameriprise Financialfound that 68 per- centofretirees with at least $100,000 in assets have notyet taken money outof their savings, beyond what they must withdraw as part of the IRS’ required mini-mum distributions retirementaccounts. from their It turns out that the transition from saving moneyto livingoff of those assets is muchtougherforseniors to navigate than manyrealized. The Ameriprise sur- vey foundthatjust onein five seniors say they feel“confident” about how to draw down their retirement savings, leaving them fraught with uncertainty about howto managetheir budgets. Helpful Hints Here are four tips that personal finance experts recommend for tapping that nest egg and making the most of yourretirement years: 1. Revisit your monthly expenses. Manypeople do a goodjobof tracking their spending in their preretirement years andestablishing projections for whatthey anticipate they will spend in retirement. Butit's importantto revisit those estimates and use your actual expendituresto fine-tune your average With properplanning, you may have more cashforyour goldenyears. live there. Manyseniors are surprised to learn that one potential asset for generating immediate cashis a life insur- ance policy. It’s your personalproperty, so you havetherighttosellit anytime. When you sell a policy—something called a “life settlement” transaction— you get a cash payment and the pur- chaser assumesall future premium pay- ments, then receives the death benefit. Candidatesforlife settlements are typ- ically 70 orolder, with a life insurance policy that has a death benefitof atleast $100,000. 4. Keepa backstopin place. Finan- cial advisers often recommendthat you keepa cash backstop in place ofperhaps monthly expenses. This will give you 12-18 months’worth ofliving expenses. a more precise handle on your spend- This will help cover unexpected costs ing needs and might also identify some (the biggest risk factor is health care areas where you can reduce spending. expenses) and provide you with some 2. Consider the bucket approach reassurance that you can weather a to income. A common approachto the asset withdrawal phase of retirement is to establish a “bucket strategy.” This sudden big-ticket item without having to cancel that long-planned vacation. egg into three buckets: (1) The Cash Bucket (one to three years of shortterm income); (2) The Income Bucket For seniors who have fine-tuned their expense budget, allocated their income into buckets that ensure cash flow, maximized the value of their everydayassets and putin place a cash backstop, there’s no reason to hesitate to draw downyour retirement accounts anymore.Juststick to yourplan andstay the course. For seniors who need additional cash flow for retirement, if they own a approach involves breaking your nest (five to eight years of medium-term income); and (3) The Growth Bucket (10+ years of long-term income). As each ofthe first two buckets gets low on dollars, you replenish them with assets from the others. This helps you achievestability in yourcash flow and increases peace of mind. 3.Maximize the value of your assets. In addition to savings accounts and retirement accounts, you may have the ability to unlock value from assets that you didn't consider. For example,if you ownyour home,a reverse mortgage can free up cash for you while youstill Remember, it’s your retirement; pay yourselffirst. life insurance policythatthey no longer needorcanafford, they maybe able to boosttheir retirementsavingsbyselling that policy for immediate cash. Learn More Forfacts aboutlife settlements, visit www.LISA.org orcall (888) 891-8383.
