Financial Focus


How to generate retirement income — during retirement


Like most people, you probably


save and invest throughout your working years so that you’ll be able to afford a comfortable re- tirement. Once you retire, you’ll want to focus on strategies to help you make the most of your retire- ment income — and you might want to become familiar with these ideas well before you retire. Basically, you’ll have some


“must do” moves and some “think about doing” moves. Let’s take a look at the “must do” ones first: • Take the right amount of dis-


tributions from retirement plans. Once you turn 59½, you may be able to take penalty-free with- drawals, or distributions, from some of your retirement accounts, such as your traditional IRA and 401(k). But once you turn 70½, you generally must start taking distributions from these accounts. Your required minimum distri- bution, or RMD, is based on the previous year’s balance in your re- tirement plan and life expectancy tables. You can take more than the minimum, but you’ll want to make sure you don’t take so much that you outlive your savings. • Maximize your Social Securi-


ty benefits. You can start collect- ing Social Security as early as 62, but if you wait until your “full” retirement age, which will prob- ably be around 66, your monthly checks will be larger. And if you wait until after your full retire- ment age before you start collect- ing benefits, your checks can be even larger, though they’ll “top off” when you turn 70. What should you do? Start taking the money as early as possible or de- lay payments, waiting for bigger paydays? There’s no one right answer for everyone. To get the maximum benefits from Social Security, you’ll need to factor in your health status, family history of longevity and other sources of retirement income. Now let’s consider two moves


that you may think about doing during your retirement years: • Purchase income-producing


investments. Outside your IRA and 401(k), you may have other investment accounts, and inside these accounts, you’ll need a port- folio that can produce income for your retirement years. You may choose to own some investment- grade bonds and certificates of


deposit (CDs), both of which can help provide you with regu- lar interest payments at relatively low risk to your principal. How- ever, these investments may not help you stay ahead of inf lation, which, over a long retirement, can seriously erode your purchasing power. Consequently, you also may want to consider dividend- producing stocks. Some of these stocks have paid, and even in- creased, their dividends for many years in a row, giving you a chance to obtain rising income. (Keep in mind, though, that stocks may lower or discontinue dividends at any time, and an investment in stocks will f luctuate with changes in market conditions and may be worth more or less than the origi- nal investment when sold.) • Go back to work. In your re-


FAMILY VACATIONS THAN YOU DO FOR COLLEGE?


DO YOU PREPARE MORE FOR


Having fun with your family is important. But nothing is more vital than your child’s future. That’s why at Edward Jones, we can help you put together a strategy to save for college.


Using our education funding tool, we can estimate future expenses at more than 3,000 schools and then recom- mend a financial strategy based on your unique needs. True, vacations are great. But graduation ceremonies are even better.


For a free, personalized college cost report, call or visit today.


Bill Boughton, AAMS® Financial Advisor


.


61 Weaver Boulevard Weaverville, NC 28787 828-645-0341


www.edwardjones.com Member SIPC


tirement years, you may decide to work part time, do some consult- ing or even open your own busi- ness. Of course, the more earned income you take in, the less mon- ey you’ll probably need to with- draw from your investments and retirement accounts. However, if you’ve started collecting Social Security, any earned income you receive before your “full” retire- ment age will likely cause you to lose some of your benefits. Once you reach full retirement age, you can keep all your benefits, no matter how much you earn. Keep these strategies in mind


as you near retirement. They may well come in handy.


This article was written by


Edward Jones for use by Bill Boughton, Weaverville’s local Edward Jones financial advi- sor.


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