Bluefield Daily Telegraph, Bluefield, WV

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Washington Post Features

September 24, 2012

Five ways to make retirement more secure

(Continued)

If you still have a large mortgage consider downsizing. If you have equity in a home consider selling it, now that the housing market is beginning to recover, and relocating to an area where the cost of living is less. Living without a mortgage is an excellent way to make your retirement funds go further.

Withdrawal strategy

If you have retirement savings, you must come up with a withdrawal strategy. Knowing how much money should be withdrawn from your retirement savings each year is a critical factor in building a retirement plan.

Withdraw too much and you are likely to outlive your assets; take too little and you may unnecessarily sacrifice your standard of living, especially in the early years of retirement.

Asset allocation

Asset Allocation is another important consideration. As individuals seek increased income in retirement, they often shift their holdings more toward bonds and cash. This may or may not be a good move, as there are other key investment considerations beyond having a need for income. Confer with your financial advisor to determine the appropriate allocation for your needs, investment objective, risk profile and time frame.

If possible, your retirement assets should keep working, providing an income stream. This income can be used to meet your day-to-day expenses.

One possible option is to allocate a portion of your savings to an annuity. Annuities are an investment tool that can provide guaranteed income for the rest of your life, no matter how long you live.

While not guaranteed, another source of income are stocks that pay dividends. While many retirement people shy away from equities, a diversified portfolio of income producing stocks and funds reduces some of the risk while providing steady cash flow.

Have a plan

"Whatever your specific plans, it's crucial that you enter retirement with a strategy for turning your savings into a retirement 'paycheck' that will allow you to live retirement on your own terms," Urbanksi said.

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