Optimizing Your Retirement Income: What Works Best and Why

by Christine S. Fahlund

Optimizing Your Retirement Income: What Works Best And Why Splash image

With the oldest baby boomers hitting 62 this year, and more than 70 million of them likely to enter retirement over the next 20 years, the hard truth is that only a small minority are accumulating enough savings to provide for their income needs during decades in retirement.

This uncomfortable reality is particularly true given the overall rise in life expectancy, sharply rising medical costs, the trend toward more active and costly retirement lifestyles, and, not least, the relentless toll of inflation.

For the financially fortunate with sufficient personal savings, Social Security benefits, and corporate pensions to meet all their retirement income needs, the main financial challenges of retirement are how to invest and spend wisely and perhaps provide for their heirs as well.

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Christine S. Fahlund , Ph.D. and CFP, is a senior financial planner and vice president of T. Rowe Price Group, an investment management firm based in Baltimore, Maryland.


Gus from Florida posted over 2 years ago:

Good ideas. Retirees might also be wise to reduce their housing costs. Pare back.
Also live within your budget -- be realistic not extravagant. Don't feel too bad if you over spend your first year or so - most retirees do. But then return to reality.
I was told decades ago to invest 50% in equities and 50% in fixed income products. It's a good idea in retirement as well.

Curt from Georgia posted about 1 year ago:

Good article with many excellent recommendations. I have just recently retired after working to age 70 and I used those extra years of income to build up our retirement PF even during the "Great Recession" and the downturn later in 2011. The first decade of the 21st century was not kind to workers attempting to build up a retirement nest egg, but increasing levels of savings represented one way to offset this problem. Staying fully invested and practicing asset allocation also helped.

Donald from Virginia posted about 1 year ago:

Retiring and remaining debt free has been the
key for us. Thank heaven we didn't fall into
the refinancing trap. When you owe little,
you can live well on less.

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