retirement

Confused on how it all works. I know approx how much SS myself and my husband will receive .We both have tiny pensions, under $1000.00 a month together. Our IRA’s have approx $200,000 Do we start taking money out of our IRA’s to make up the difference in what we need to live?

Terry Says:  Aha — that is the critical question for all retirees:  How can I make my money last as long as I do??

You need some personal guidance.  Start by making a budget –and be sure to include the fact that Medicare will be deducted from your Social Security check, and that you will also need to pay for a Medicare supplement policy to cover all those things, including co-pays that Medicare doesn’t cover.  That will make a big dent in your Social Security checks.  So you need to figure out your monthly expenses if you retire –and take a realistic look at  your income.

It appears you haven’t retired yet.  And most likely, when you take a realistic look at your needs for money, you should not retire until you absolutely cannot work anymore!  It’s sad that fully one third of retirees rely on SS for nearly 90 percent of their income.  But if you have a choice to work longer, that’s what you’ll want to do — even if it is only part time.   That gives your IRA more time to grow tax-deferred.

I’ll give you two places to go for help.  The first is the National Foundation for Credit Counseling at 800-388-2227, which automatically connects you to the nearest local office.  Yes, I know you don’t have credit problems — yet.  But they can help you create a realistic retirement budget.

Second, I don’t know where you IRA is held, but you might contact Vanguard at 1-800-VANGUARD and tell them you’re considering “rolling over” your IRA to them.  They can help you set up an investment and withdrawal plan — preferably waiting until it is required after age 70-1/2 — designed to make your money last your lifetime.