You've Retired! Now Put Your Plan to the Test. By Donna Rosato and Susie Poppick Welcome to your first year of retirement. You made it! Hard work and diligent saving have paid off. Your financial plan should practically run itself at this point. Still, aim to check in periodically. What To Do Don't go chasing yield. Anyone who has substantial money outside tax-deferred accounts and is in a high tax bracket should consider munis too. Every couple of years, trim a few percentage points from your stockholdings and stick the money in bonds and cash. "At that point, you don't need as much growth to keep up with inflation," says Greg Carroll, managing partner at Sterling Wealth Management in Carlsbad, Calif.
Do a yearly spending checkup. "Retiring is like going on a long vacation, and you always spend more on vacation," says wealth adviser Jeff Townsend. Townsend suggests tracking your spending once annually to keep yourself honest. Take from all baskets. Never retire your résumé. See more from CNNMoney: One Year From Retirement? Prepare to Make the Break. By Donna Rosato With one year left until retirement, you're in the final stretch. It's time to prepare for the transition. Practice your budget, plan your income sources, and take action on health insurance. What To Do Now dial back on stocks. The max you should have in stocks: 40% to 50%. Stress-test your spending. As a rule, you can withdraw up to 4% of savings the first year, then adjust by inflation in subsequent years, and have a good shot at your money lasting 30 years. Whatever budget you decide on, practice living on it now. Shore up your income. One solution: a lifetime immediate annuity.
You can't access money you put in, however, so invest only enough to cover the shortfall in basic living costs left after other guaranteed income. Also, don't go all in right away, since interest rates partly determine payouts. Pick up the pension check. "You don't get a second chance on this decision," says New York elder-law attorney Ann-Margaret Carrozza. Stockpile cash. Retiring around 65? How to Ruin Your Retirement in 3 Steps. By Jeff Rose Most of us say that we want a successful retirement. Unfortunately, too many of us don't think things through, and could end up unprepared for retirement. It's remarkably easy to wreck your retirement years. Here are three steps that are likely to ruin your retirement: 1. Forgo a plan. Planning often seems overrated. A retirement plan forces you to look beyond what you think you want right now. Create a realistic retirement plan that allows you to save up for the retirement you want, and that encourages you to start taking the steps that lead to a successful retirement later. 2.
Instead of getting into debt now, live within your means. Learn to live without debt, and your retirement will be more successful in the long run. 3. Take care of yourself now. If you stay active, body and mind, you can improve the odds that you will need fewer medical services. Consider your current situation, and think about what you want for the future. See more stories on U.S. Decisions, Decisions. Retirement Fire Drill.