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Retirement can open a world of new opportunities, so you'll want to make sure you have the finances available to live the way you want. When you retire or are very close, your retirement plan is just as critical as when you were saving.
Developing a retirement budget can help ensure that your money will last throughout your retirement. Many people spend one-third or more of their lives in retirement, so it's important to have a plan. Taking inventory of your retirement income and expenses will help you know exactly where you are.
Use the Planning for Your Retirement tool to create your budget as part of your overall plan. You'll have a comprehensive plan in about 15 minutes.
Next: Investing in Retirement
A solid retirement portfolio can provide income for expenses and may continue to earn you money, even as you begin to make withdrawals. Here are some tips for investing when you are close to or in retirement.
First, set aside money for the unexpected. Your emergency account should be large enough so that you don't need to sell some of your investments. A good guideline is to set aside enough to cover three to six months of your living expenses.
Dividing your investments among stock, bond and money market mutual funds can help balance your portfolio. Although this kind of diversification strategy has been successful for many investors, it cannot ensure against loss.
Preserving your retirement savings is of utmost importance, so most retirees opt for a more conservative portfolio. How much risk you keep in your portfolio is an individual decision, but one you will want to consider for your retirement investments.
Do a quick check-up on your retirement portfolio.
Next: Withdrawal Strategies
During retirement you will begin to shift your strategies from building your investments to planning your withdrawal strategy. Consider the following as you think about how and when you will withdraw money from your savings.
A major factor in determining how long your money will last is how much you will withdraw each year. Experts say a good place to start is with a 4% to 5% withdrawal rate.
Your strategy will help you determine from which accounts to withdraw first and how you want to receive your payments.
Decide When to Receive Withdrawals
There are many options for how and when you want to receive your money during retirement. You can set up an automatic withdrawal plan to receive your money as often as you would like. Learn more about our Paycheck In Retirement service that allows you to receive a regular paycheck, just like when you were working.
Past performance is not a guarantee of future results. Investment return and principal value will fluctuate and it is possible to lose money by investing.
Earnings in an IRA are tax-deferred until withdrawal. A 10% penalty may apply to withdrawals before age 59½.
Brokerage Services are provided by American Century Brokerage, a division of American Century Investment Services, Inc., registered broker/dealer, member