About to Retire?by Debbie Vasen | More from this Blogger 28 May 2008 08:41 AM If you are very close to retirement, the struggles in the economy may worry you. When your retirement occurs at the same time as a market lull or bear market, there are some standard "rules" to follow. Most people these days are living longer. Therefore, when you do retire, you will need to ensure you have enough income to sustain your standard of living for 30 plus years. This can be tricky to accomplish if the market is on a downtrend. Many financial experts recommend that you withdrawal no more than four percent of your total portfolio as an initial first year income. Then you can increase that amount by about three percent per year due to inflation. If the market is on the downside, this strategy can be riskier. If you withdrawal too much earlier on, you run the risk of running out of money. If the market is down, it can be easy to get ahead and sell off too much of your portfolio. Markets do fluctuate. If you can be patient, then you can recover from this drop. If you are retiring soon, you need to be extra careful in these first five years. Ideally, you will want to cut back on your initial withdrawals until the market starts to improve again. There are a couple ways to get through this. You can postpone retirement, you can continue to work part time or freelance, or you can live frugally until the market improves. What you decide to do will ultimately depend on your unique situation. If you do decide to still retire completely and withdrawal money from your portfolio, be careful. I highly recommend you sit down with a knowledgeable financial planner to ensure the parts of your investments you sell to begin your retirement make the most sense to the larger picture. In general, you don't want to sell off those equities that are on the downturn. Ideally, you want to wait until the market recovers. Related Articles: *http://money.families.com/blog/couple-retirement-planning Learn more about Debbie Vasen  Debbie Vasen is a published web content editor and writer, as well as a freelance writer for various print publications. In addition to blogging at Families. Relevantmoney tags User Comments Susan Klopfer (12) 17 Feb 2009 11:51 AMThanks for some needed help. I'm so unsure about the market now, that we are going to try and not tap into anything at first, just social security, and later pull only 2-3% from out IRA's and retirement account. Also, we're saving money by going to Ecuador to live. You are invited to check out my retirement blog at http://comingofretirementage.com Community Tags bear market, coming of retirement age, retirement, saving Discuss this article
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