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At some point, almost everyone asks, "Will my money last?"
And even though life doesn't hand out guarantees, you can feel more confident about your answer if you prepare with the help of your Edward Jones advisor. We'll walk you through the process and discuss all your "what if" and "how to" questions.
The answer to this question really comes down to how much you've saved and how you spend it. And if you're already retired or close to it, focusing on what you can control now – your spending – probably makes the most sense.
Since your spending needs may rise and fall over the years, be flexible. For example, if you can take out $10,000, but you only need $8,000, then just take out $8,000. And if you feel your purchasing power is keeping pace with inflation fairly well, don’t automatically take out more every year.
We recommend a cash balance to cover about 12 months’ worth of living expenses, as well as a short-term fixed-income ladder (in investments like short-term bonds or CDs) for your first few years of expenses.
This may be especially important if the market drops in the first few years after you retire. Your cash reserves can help you avoid selling investments – and losing potential growth opportunities – if you face down years in the market early in retirement.
You can receive guaranteed income* through annuities offered by insurance companies. Since certain annuities can offer insured payments for life, they may help fortify your income by providing “income insurance” – a lifetime payment stream regardless of market performance or how long you live. Like any investment, annuities have trade-offs to consider. To learn more about annuities, see Annuities.
To help combat rising long-term health care costs, you may also consider options, such as long-term care insurance, that address where care is administered and how to pay for it. Because these options (link to I&S LTC/hybrid page) and their coverage limitations can be complex, we recommend working with your Edward Jones advisor to find out which may make the most sense for you.
The review may be your most important step. Remember, your retirement could last 25 years or more, and undoubtedly your goals and situation will change over time. Regularly reviewing your strategy with your Edward Jones advisor and making adjustments (if necessary) could help ensure your retirement stays on track.
Using these principles as a starting point, talk with your Edward Jones advisor today about ways to help make your money last.
*All contract and rider guarantees are subject to the claims-paying ability of the issuing company.
Insurance and annuities are offered by Edward Jones Insurance Agency (except in Québec). In Québec, insurance and annuities are offered by Edward Jones Insurance Agency (Québec) Inc.