The key to securing a good life after retiring lies not only on how well you invest during your working days. Even if you have invested well, you might not be living as well as you envision if you fail to take care of how you will take care of your investments after you retire. Fool.com gives us this situation: if you are 55 today and you have accumulated a portfolio worth more than a million bucks and you opt for a withdrawal rate of ten percent, you’d end up looking for work by the time you reach 70. That’s not so good right? So what can we do to avoid that predicament? Or much better, how much should one withdraw to make sure that his or her investments will last until its time to go bye-bye?

There are a lot of resources which can tell you how to be your own investor, and I’m pretty sure that they can tell you how much should you withdraw upon retirement. Certified financial planner William P Bengen gave us “The Four Percent Drawdown” for withdrawal rates from retirement savings. Those who followed this philosophy found out that drawing four just four percent from their nest egg is the best compromise between maintaining their lifestyle after retirement and keeping it large enough so that it will last literally for their lifetime.

The best way to make sure that your retirement investment will not dry up before you is to plan. As cheesy as it may sound, planning is still the best way to keep your future secured. Just as it take a lot of planning for your retirement, expect also that you should have to do a lot more planning even after you have hung your cape. You can free your investments on volatile stocks. You don’t want your life savings of course to be dependent on the fate of a small albeit profitable company. You might consider buying stocks from large companies which have been in their business for so long that only a major collapse in the economy can bankrupt them. Although it might pay less, it will provide you with the security that you need before you hit the beach and eventually fade into the sunset.

This entry was posted on Tuesday, October 2nd, 2007 at 8:00 am and is filed under Investing Basics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.