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Securing a Comfortable Retirement with $1 Million in Your IRA

At 70, having $1 million in your IRA is a significant achievement, but it’s crucial to plan carefully to ensure it lasts throughout your retirement. With a potential 20-year or more retirement horizon, you’ll need to balance risk, secure reliable income streams, and understand how required minimum distributions (RMDs) affect your finances.

Assessing Your Personal Situation

To create a sustainable retirement plan, you’ll need to consider your income needs, expenses, and personal goals. Ask yourself:

• How much will you budget for basic living expenses?
• What large purchases, vacations, or indulgences do you desire?
• How risk-averse are you?
• Do you want to leave an inheritance?
• Do you have health issues requiring significant care costs?
• What are your expected income sources?
• How will taxes affect your income in retirement?
• What is your best estimate for returns on investments in your IRA?

Key Strategies for Making Your $1 Million IRA Last

1. Spend Conservatively: Aim for a 4% annual withdrawal rate to minimize the risk of depleting your savings.
2. Invest Wisely: Allocate 60% of your portfolio to stocks and 40% to bonds using low-fee index funds to balance growth and stability.
3. Diversify Income Streams: Utilize Social Security benefits, part-time work, and annuity payments to reduce reliance on your IRA.
4. Manage Risk: Address investment risk, longevity risk, and health costs by diversifying your portfolio, considering immediate annuities, and securing insurance.
5. Plan for RMDs: Understand the tax implications of RMDs and plan accordingly to avoid penalties and minimize tax liabilities.

Estate Planning and Trusts

Trusts can be an effective tool in estate planning, helping to manage inheritance taxes, control distributions to heirs, and protect retirement savings. Consider consulting a financial advisor to explore options such as retirement trusts and charitable remainder trusts.

Prudent Management for a Secure Retirement

By adopting a realistic budget, controlling portfolio risk, and utilizing insured income streams, you can increase the chances of making your $1 million IRA last throughout your retirement. Don’t hesitate to seek the guidance of a financial advisor to create a personalized plan tailored to your needs and goals.

Take the First Step Towards a Secure Retirement

SmartAsset’s free tool can match you with a financial advisor who can help you achieve your financial goals. Get started today and take control of your retirement planning.