How Do I Manage My Savings and Other Assets?

• You do not know how long your retirement will last. It is important to invest in diversified assets, even as you enter retirement. Consider how much risk you can tolerate in making your investments and get good advice about how to best invest your assets to fit your personal situation.
• Consider investing part of your retirement savings in an annuity (or other investment option) that gives you a steady paycheck for your entire retirement. Be aware that these can be complex financial products.
• Set aside at least a year’s worth of living expenses in cash to avoid having to sell investments at low values. An even better option is to have between three and five years of living expenses (that are not covered by Social Security and/or a pension) safely set aside, just in case you retire during a down market.
• The amount you withdraw for living expenses is critical. Don’t withdraw too much:
  • Make sure you have enough money for at least 30 years of retirement. If you haven't calculated your retirement savings need, you can do so using the Ballpark E$timate.
  • Many advisors recommend that you don’t withdraw more than 4 percent of your savings in the first year and adjust it annually for inflation (e.g., 3 percent of the prior year's withdrawal). However, this percentage is subject to debate in the financial community and among academic researchers, especially given market and economic conditions (e.g., low interest rates) as well as your personal and financial circumstances.