Keep Your Retirement Dollars Flowing

To make your retirement dollars last, you have to stick to your budget and manage your withdrawals. It is difficult to predict what will happen in the future. The economy keeps changing and that means that what you think may be enough money now may not be when you retire.

Participate in your employer's retirement plan. Some allow you to contribute pre-tax dollars and match your contributions up to a certain percentage. When you choose investments, look at the long-term risk. Your age may be a determining factor in whether you choose high risks investments. You do not want to invest in a volatile portfolio if your retirement is just a few years away.

You can work longer. Instead of retiring at age 62, you may want to consider retiring at age 66. These extra years may give you time to grow your portfolio and reduce the amount you need to withdraw.

Before you retire, you should try to have two to three years of living expenses in a money-market fund. You will not have to sell your investments when they are down. You should have your money split between equity funds and cash.

Try not to withdraw funds from your retirement fund. If you change jobs, do not take the lump sum cash from your company retirement plan. Instead, roll it over into another account. If you take the money, you will have to pay taxes and a penalty if you are not 59 1/2 years old. A bigger problem is that you may spend the money and not be able to replace it.

After you retire you do not want to be in the position of having to look for work to make ends meet. Instead, you want to be able to enjoy your free time. If you do take a part-time job, it will be because it is something you want to do.