The withdrawal rate you choose will determine how much income you get from your investments, as well as the likelihood of your nest egg running dry too soon. The withdrawal rate refers to the amount you take out of your account every year.
Traditionally, experts advised you could safely withdraw 4% of your nest egg in the first year of retirement and then adjust that amount by inflation each year and not risk running short of funds. However, this rule is considered by many to be outdated, since life spans and projected investment returns have changed, so you may wish to be more conservative and choose a lower rate.
4. What insurance coverage you buy
Finally, you need to make smart decisions about insurance. This means buying the right coverage before becoming Medicare eligible at 65 if you retire early. And it means researching exactly what Medicare does — and doesn’t — cover and comparing options such as Medigap and Medicare Advantage to make sure you have the protection you need.
By taking steps to avoid huge out-of-pocket health expenses, picking the right place to live, and being smart about how you access your savings and Social Security benefits, you can hopefully end up with a comfortable retirement with plenty of financial security.
The $16,728 Social Security bonus most retirees completely overlook
