If you thought investing in your 401(k) plan was hard, just wait until the time comes when you have to start taking money out of your retirement plan.
Are you ready for this?
“In pre-retirement planning, the investor needs to decide three things: how much to invest, asset location and asset allocation,” says James DiLellio, Associate Professor of Decision Sciences at Pepperdine Graziadio Business School in Los Angeles. “In post-retirement planning, there are many more decisions. For example, how much to withdraw, asset allocation, when to draw down a pension if applicable, when to begin Social Security benefits, drawdowns from taxable versus tax deferred accounts, and planning for use of your estate after you are gone.”
It’s tough to predict the future. It’s even tougher to plan for it. If you’re like many others, you prefer the comfort of certainty over the anxiety of unpredictability. When you’re working, you can nestle into a cozy routine. Once you retire, everything changes. Change can strike in many ways. And this change is only the first thing that confronts you.
“The transition to retirement can be daunting on many levels — emotionally, psychologically and financially,” says Greensboro, North Carolina based Tiffany Lam-Balfour, Investing and Retirement Specialist at NerdWallet. “Emotionally, your career often provides a sense of purpose and it can be hard for some retirees to cope with finding a new purpose….