29 September 2008
By Patricia Kitchen
Advice for retirees living on a fixed income:
If money is tight and you own your home, consider taking in a roommate or checking with your town's building department to see if you can create an apartment to rent to family or friends in a similar boat. You can increase your income and "company is good, too," said Mignone.
Stop by senior centers to learn about discounts and special services, such as those related to entertainment, health, real estate tax relief, even free tax preparation.
Despite today's topsy-turvy market, retirees, depending on their situations, should not eliminate stocks entirely from their portfolio mix. "The biggest enemy of retirees is inflation" and stock holdings, over time, can help you keep up, said Mignone.
Do a cash flow analysis, tallying up expenses and income from all sources, including Social Security, pensions and annuities, to determine how much you will need to withdraw from investments each year. Mignone said a general rule of thumb is to plan on withdrawing 3.5 percent to 5 percent annually, but that depends on the amount you have saved, as well as your age. Those who are 70 could have 25 years ahead of them, he said.
Be wary of sales people preying on retirees, those pitching expensive annuity products and highly commissioned investments. And don't sign anything without doing research and running the idea by several people you trust, Mignone said.