Farrell: Spending retirement funds can be harder than saving them in the first place

Q: My husband and I have accumulated a nice chunk of money for retirement. But I think getting the money was the easy part. Now that we are about to retire we need help managing it — knowing when, where, and how to pull money out, whether to consolidate accounts. Can you recommend good sources that will help us learn to manage these accounts in retirement?

Susan

A: You’re right. The decision about where to invest your money when saving for retirement is easier than figuring out how best to take it out in retirement. Uncertainty is built into any calculation over how much you can safely withdraw from your portfolio to maintain your standard of living. Any portfolio decisions should be coordinated with when you want to file for Social Security benefits. The withdrawal rules aren’t simple and many households find themselves dealing with a grab-bag of retirement savings plans around the time their career winds down, say, a pretax employer-sponsored 401(k) or 403(b), a Roth-IRA, and a SEP-IRA.

A book that offers a broad overview and practical advice is “The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work, and Living’’ by journalist and author Mark Miller. Another book full of practical money insight is “Getting Started in a Financially Secure Retirement’’ by Henry “Bud” Hebeler. I would spend time at his website www.analyzenow.com. It offers savings and portfolio advice along with retirement calculators to help you make informed money decisions, including filing for Social Security. (Some of the calculators are free; others come with a small fee.)

I’d also look at “Risk Less and Prosper: Your Guide to Safer Investing’’ by Zvi Bodie and Rachelle Taqqu. The Boston University finance professor and certified financial analyst, respectively, offer a powerful case for setting up a conservatively managed portfolio for your retirement years to limit your downside risks.

When it comes to grappling with the nuts and bolts of getting your money out of your various retirement accounts, look at “IRAs, 401(k)s & Other Retirement Plans: Taking Your Money Out,’’ by John Suttle and Twila Slesnick. It’s published by Nolo.com, the self-help legal advice organization. The “Retirement & Social Security” section of Nolo.com has information on a range of issues, including taxes during retirement, Medicare and long-term care insurance.

The next three books are geared more toward helping you think through what retirement means to you. Your vision of the last third of life will deeply influence your money strategies. “Get a Life: You Don’t Need a Million to Retire Well’’ is by Ralph Warner, the founder of Nolo.com. His book is a creative conversation about the last third of life. Marc Freedman’s “The Big Shift: Navigating the New Stage Beyond Mid-Life’’ gets you thinking about what kind of work you might want to pursue after retiring. Freedman is the founder of Encore.org, a nonprofit that encourages people to launch new careers as they age, work that combines meaning and money. Lee Eisenberg is the author of “The Number: A Completely Different Way to Think About the Rest of Your Life.’’ He uses the device of the “Number”— the uncertain and unknowable sum of money you’ll need to live well during retirement — to write a meditation on planning for your later years. Good luck.

Chris Farrell is economics editor for “Marketplace Money.” His e-mail is cfarrell@mpr.org.

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