1. Making Retirement Funds Last

2. Making Retirement Funds Last
About the PICPA
The Pennsylvania Institute of Certified Public Accountants (PICPA) is a professional association of more than 22,000 members working together to improve the profession and serve the public interest.
Making Retirement Funds Last

3. Making Retirement Funds Last
Reality Check
Many are unprepared for the reality of retirement
Life expectancies are going up—retirement may last longer than you expect (25-30 years)
How much you withdrawal early on in your retirement will greatly impact your later finances
Making Retirement Funds Last

4. Consider Delaying Taking Social Security Payments
If you delay receiving your Social Security benefits until after your retirement age, your check will increase.
If you wait until 67, there’s an 8% increase.
If you wait until age 70, there’s a 35% increase.
You must start collecting at age 70 ½.
Making Retirement Funds Last

5. Balance Your Portfolio
Put money into a diversified portion of stocks, bonds, and real estate that pays dividends.
Ladder your bonds.
In your portfolio, ensure that your fixed-income securities have significantly different maturity dates.
Making Retirement Funds Last

6. Making Retirement Funds Last
Immediate Annuities
Put money in an insurance contract that pays a fixed rate of return.
Comparison shop!
Annuities tie up your money—you’ll have no access to it for a certain period of time.
Making Retirement Funds Last

7. Making Retirement Funds Last
Other Options
Longevity annuities—Typically begin to pay out in your 80’s
Reverse mortgages
Only collect interest or dividends from certain retirement plans
Longevity insurance
Life insurance on your spouse to refill the retirement investment account
Making Retirement Funds Last

8. Making Retirement Funds Last
Tips
Get good, objective advice.
Monitor your funds yearly.
Try to live on nonretirement assets to let your 401(k) and IRAs grow as long as possible.
Manage your withdrawals from qualified and nonqualified accounts to minimize your tax expense.
Making Retirement Funds Last

9. Making Retirement Funds Last
Early 401(k) Withdrawals
There is a 10% penalty for early distributions.
Early is anything before the age of 59 ½.
Regular income taxes must also be paid on amounts withdrawn.
Some exceptions:
You die and bequeath the account; you become disabled; you terminate employment and are 55+ years old
Making Retirement Funds Last

10. Making Retirement Funds Last
Early 401(k) Withdrawals
Things to consider:
Many employers only allow early withdrawals in cases of financial hardship.
You lose the potential investment growth on the money you withdrawal.
You may not be able to reinvest the full withdrawn amount because of contribution limits.
Making Retirement Funds Last

11. Making Retirement Funds Last
Be Wary of Fraud
Pyramid Scheme: claims to turn small investments into large returns
Ponzi Scheme: a central fraudster collects money from new investors to use as “returns” for other investors
Rx Drug Scam: unsolicited discount drug cards offered
Audit Scam: unsolicited review of documents containing personal information offered
There are many more.
Making Retirement Funds Last

12. Making Retirement Funds Last
Fraud Red Flags
Guaranteed performance on an investment
Unregistered individuals selling unregistered securities
Overly consistent returns
No prospectus, no offerings, no stock symbols on stocks being sold
Pushy sales people or high-pressure situations
Making Retirement Funds Last

13. Making Retirement Funds Last
Avoiding Fraud
Are your investment professionals licensed?
Check to see if a license was ever suspended or revoked.
Brokercheck.FINRA.ORG
Ask questions.
Scammers count on you not bothering to investigate.
Be wary of unsolicited offers.
s, phone calls, letters, and more
If it sounds too good to be true, it probably is.
Making Retirement Funds Last

14. Making Retirement Funds Last
Resources
The PICPA:
Social Security:
AARP:
Making Retirement Funds Last

15. Making Retirement Funds Last
Questions?
Making Retirement Funds Last