Retirement Tips

Many folks are putting off retirement because of their shaky portfolios. Stephanie AuWerter, Contributing Editor for SmartMoney.com, has some advice for keeping your retirement on track.

If you're nearing retirement, before you panic about 401k losses or your stock portfolio, be sure to crunch the numbers. "You need to know if you need to come up with a new strategy," says AuWerter. "You want to shoot to have 80% to 100% of your pre-retirement income during retirement." Don't forget to take into consideration additional income from pensions or social security checks.

If your savings fall short, you'll need to save more. If that's the case, don't shy away from the stock market just because it's down. AuWerter advises that money that you'll need in the next five years does not belong in the stock market. However, "Trying to time the stock market - to pick the right time to jump back in - is a very tricky business," she adds. If you're still leery, invest in a bond fund or a a CD because, "It's certainly better than not investing at all," says AuWerter.

If you're still struggling, now may be the time to consider postponing your retirement. By withdrawing funds early in a down market, you can really hurt your portfolio. If you have to, "Work part-time during your early retirement years," says AuWerter.

Trying to stretch those hard-earned dollars can be tricky, but you may consider relocating to an area where the cost of living is less. "The key is to find a community where you'd be happy," says AuWerter. Consider renting in prospective areas before making a full-time move. If moving isn't an option, consider downsizing your home to a smaller one, or apply for a reverse mortgage. "You basically sell your home to the bank and they pay you for as long as you stay in the house," says AuWerter.

It's also important to consider the worst - a medical emergency or stay in a nursing home could wipe out all of your retirement savings. To be protected, consider applying for long-term care insurance. "It's something that you do want to look at buying in your 50's and 60's," says AuWerter. "You need to buy it while you are still in good health."

For more information on funding your retirement, as well as additional personal financial advice, click here to visit www.SmartMoney.com.







By Erin Petrun
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