| Today's seniors can expect a longer retirement than | | | | Employer pension plans usually have options |
| their parents. That means more years to finally do | | | | somewhat similar to those of Social Security. Contact |
| what you want to do, including travel and hobbies (not | | | | your employer's personnel department for guidance. |
| to mention spoiling the grandkids). But a longer | | | | No matter when you decide to start receiving your |
| retirement also means more years of money going | | | | benefits, remember that it could take several weeks to |
| out and no paycheck (or only a small one) coming in. | | | | receive your first payment. Also consider having your |
| That's why seniors need to be smart about how they | | | | payments deposited directly into your bank account so |
| pay for their retirement years. | | | | you don't have to worry about a check getting lost or |
| "You really need to have a strategy to make sure | | | | stolen in the mail. |
| your savings last," said Lee Bowman, National | | | | IRAs, 401(k)s and Other Retirement Savings Plans: As |
| Coordinator of Community Affairs at the FDIC. | | | | with your Social Security and pension benefits, you |
| To help you set or adjust your own plans for affording | | | | may want to delay tapping into your retirement |
| retirement, FDIC Consumer News offers this look at | | | | accounts as long as possible so they can continue to |
| some different sources of money, including some | | | | grow to cover unexpected medical costs in the future |
| potential pitfalls to avoid. But first, remember that this is | | | | or to protect the inheritance for your heirs. However, if |
| general guidance only. Your own need for retirement | | | | you need to supplement your income, Individual |
| money will depend on factors such as your | | | | Retirement Accounts (IRA) and other retirement |
| health-care costs or whether you plan to earn | | | | savings can be a good source. |
| part-time income. As with any major financial decision, | | | | Before you start withdrawing money from your |
| be sure to consult with financial advisors and loved | | | | retirement accounts, most financial planners suggest |
| ones to decide what strategies are best for you. | | | | setting a target annual withdrawal rate. Make it low |
| Social Security and Pension Benefits: Your first order | | | | enough to avoid depleting these funds too quickly. You |
| of business: Determine when the best time is to start | | | | can fine tune your withdrawal strategy each year, |
| tapping this money. For example, if you start receiving | | | | preferably with the guidance of your financial or tax |
| your Social Security benefits before your "full" | | | | advisor. For example, if your personal situation |
| retirement age (which could be anywhere from 65 to | | | | changes, you can adjust how much you should |
| 67 under current laws), your benefits will be reduced | | | | withdraw. |
| permanently, and perhaps significantly, from what they | | | | Also review your retirement portfolio - your mix |
| would be at your full retirement age. And if you | | | | among stocks, stock mutual funds, CDs (certificates of |
| receive Social Security benefits early, but you continue | | | | deposit), bonds and so on - to be sure it's |
| to work and your earnings exceed certain limits, your | | | | well-diversified. |
| benefits will be reduced even more until you reach full | | | | Another caveat: If you have retired, every year after |
| retirement age. On the other hand, if you delay | | | | age 70 1/2 be sure to take out at least the minimum |
| collecting Social Security until after your full retirement | | | | required distribution from your tax-deferred retirement |
| age, you can continue to work and still get your full | | | | savings plans (except Roth IRAs) to avoid large IRS |
| retirement benefits, or even higher benefits, no matter | | | | tax penalties. (If you are still working at 70 1/2 or later, |
| how much you earn. | | | | you do not need to start taking minimum distributions |
| Here's basic guidance from the Social Security | | | | from your employer's plan until April 1 of the year |
| Administration (SSA): "As a general rule, early | | | | following the year you finally retire.) |
| retirement will give you about the same total Social | | | | "Remember, you only have to withdraw the money, |
| Security benefits over your lifetime, but in smaller | | | | you don't have to spend it," said Heather Gratton, an |
| amounts to take into account the longer period you will | | | | FDIC Senior Financial Analyst. "If you don't need the |
| receive them. There are advantages and | | | | money you can reinvest it somewhere else, such as in |
| disadvantages to taking your benefit before your full | | | | a bank savings account." She added that, because |
| retirement age. The advantage is that you collect | | | | each person's situation is different, it's best to discuss |
| benefits for a longer period of time. The disadvantage | | | | your strategy with your tax or other advisor. |
| is your benefit is permanently reduced." | | | | |