How to Protect Your Retirement

The future’s unpredictability makes many people feel uncertain about how to prepare for and protect their retirement. While working, you know how much money to expect each week, providing greater financial certainty. However, once you stop working, knowing where to put your savings and how much you will need can be difficult. At HSC Wealth Advisors, we offer comprehensive retirement planning services to protect your hard-earned money so you can focus on enjoying your golden years.

6 Ways to Protect Retirement Money

As you age, it is essential to evaluate your retirement plan, especially as you get closer to retiring. Ensure your savings are secure by considering your current finances and future needs. Some effective ways to protect your retirement money include:

1. Create a Budget

Estimating how much money you will spend during each year of retirement can aid in determining a budget for your retirement account. For example, if you retire at 65, you must plan for at least 20 years of expenses.

Since your funds need to potentially last decades, you may wish to consider your withdrawals from a 401(k), IRA, or 403(b) as your paycheck during retirement. These accounts, in combination with Social Security and other income, can cover your daily expenses. Creating a budget early can prepare you to avoid overspending, debt, or spending all of your savings.

2. Know Your Risk Comfort Level

For long-term investing, you can choose how you allocate your funds, such as investing in stocks or a money market account. The amount of risk each investment offers will vary, and investments with a higher risk often result in a greater rate of return.

Before making an investment decision, talk with the financial professionals at HSC Wealth Advisors to consider your options. Your financial professional can adjust your investments to align with your risk comfort level.

3. Consider When You Are Retiring

If you start a retirement account in your 20s, 30s, or 40s, you may wish to choose an investment option with a higher risk. For example, if the market experiences a decline after you invest in stocks, you still have a long time until you can access the funds, which allows enough time for the market to recover. However, if you are in your 50s or very close to retirement, it may be wise to utilize lower-risk investments to ensure your current funds or catch-up contributions are safe.

4. Have Cash Available

Life is full of unexpected events and costs. If an unforeseen medical expense occurs or you need a significant home repair, you should not use your retirement funds to cover them. Keep some funds in a checking or savings account you can access easily to avoid a fee for using funds from your retirement account early.

5. Plan for Taxes During Retirement

It is helpful to plan for the future and know what to expect to avoid tax surprises during retirement. For example, placing money into a traditional IRA will deduct contributions from your present tax returns. However, you must pay taxes when withdrawing money from the account during retirement. If you choose a Roth IRA, you pay taxes on the amount you contribute, so you can withdraw without paying taxes later.

6. Think Beyond the Market

If you are anxious about possible market fluctuations, you can place funds aside in savings or checking accounts that are safe from market fluctuations. With these accounts, your funds are under the control of a bank or insurance company, allowing you to avoid any negative market changes.

Where to Put Retirement Money After Retirement

As you approach retirement, it is essential to consider your current finances and how to safeguard your earnings to ensure you can enjoy a comfortable retirement. Some of the safest places for retirement money include:

• Fixed annuities: Since fixed annuities offer a set minimum credit rating over a contract term, as long as you leave your money alone, the value will not drop below the original contribution.
• Bank savings accounts: Once you put money into a savings account, you can be confident you can access it in the future. Many banks are FDIC-insured, which means even if your bank experiences bankruptcy, the federal government will cover your savings.
• Certificates of deposits: Certificates of deposit are another kind of account and offer slightly higher rates than traditional savings accounts.
• Treasury securities: Treasury securities include treasury bills, notes, and bonds you can purchase with the promise the treasury will repay you later. Treasury securities are a safe investment option because they have backing from the US federal government.

Learn How to Build Wealth in Retirement

While it is essential to set funds aside, you can ensure a comfortable retirement in many ways. At HSC Wealth Advisors, we know the ins and outs of retirement investing. Whether you would like to read more on our blog about building wealth in retirement or speak directly with an advisor, our team is here to help you lead the relaxing life you deserve after years of hard work. We look forward to speaking with you soon!