Knowing these figures, you can either slow your spending to preserve your savings or spend your money more quickly because you have more than enough. If you haven't created a budget, take the time to determine your cash flow and net worth , essential steps to establishing an appropriate and realistic budget. The more you depend on your retirement savings for income, the more conservatively you should invest because asset preservation is critical. However, depending on the size of your savings, it may make sense to invest a portion of your savings more aggressively. If you can afford to invest a larger portion of your savings in higher risk investments, the higher returns could help you grow your savings during retirement or at least provide more monthly income.
Most people slowly deplete their retirement savings as they age.
It takes careful planning to make sure that you don't deplete your savings too quickly. The rate of return you expect on your investments Fortunately, the power of compounding is at work to help preserve your savings. In fact, depending on how much income you need and the size of your savings, you may actually accumulate money during retirement. The flipside of this planning is to make sure that you aren't drawing from your savings too slowly. Estimate the rate of return you expect on your savings.