Keep these tips in mind when you’re planning a home office:
- Be sure it’s ergonomically correct
- Find the optimal location
- Consider used office furniture
- Incorporate lighting, plants and sound
When retirement was years away, calculating how much income you would need may have involved a lot of estimates. Now, as retirement draws nearer, you may need to be more accurate. Consider the following factors:
Because the rate of inflation can vary over time, it’s a good idea to tack on an additional 4% each year to help compensate for increases in the cost of living. Keep in mind that, unlike stock investments, Discover IRA CDs can help reduce uncertainty in your financial outlook because returns are guaranteed.*
The next step is to identify potential income sources, including Social Security, pensions, and personal investments. Also review your asset allocation — namely, how you divide your portfolio among stocks, bonds, and cash2. Are you tempted to convert all of your assets to low-risk securities? Such a move may place your assets at risk of losing purchasing power due to inflation. You may live in retirement for a long time, so try to keep your portfolio working for you both now and in the future.
Once you’ve assessed your needs and income sources, it’s time to look at tapping your nest egg. First, determine a prudent withdrawal rate. A common approach is to liquidate a maximum of 5% of your principal each year in retirement; however, your income needs may differ.
Next, you’ll need to decide when and how much to withdraw from your tax-deferred and taxable investments. Investors are required to take annual distributions from employer-sponsored retirement plans and Traditional IRAs after age 701/2. Be aware that these distributions are subject to federal income tax.3
Regardless of your specific plans for retirement, a Discover IRA CD’s competitive rates, guaranteed returns, and flexible terms can help make your goals easier to achieve.
In addition to offering IRA CDs, Discover also offers an Online Savings Account to help you with your short-term savings goals, a full range of CDs to help you save for the future, and Money Market Accounts that offer competitive rates. Open an account online in minutes or call our 24-hour U.S.-based Customer Service at 1-800-347-7000.
*The guarantee assumes funds remain on deposit for the full term.
1Source: National Health Statistics Data Brief, December 2014
2Asset allocation does not assure a profit or protect against a loss in a declining market.
3Withdrawals from tax-deferred accounts made prior to age 59 may be subject to an additional 10% penalty. In the case of employer-sponsored plans, there are special rules that apply to plan participants aged 55 and older who separate from service.
The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your tax advisor with respect to information contained in this article and how it relates to you.
It all depends on your financial goals and how you plan to manage your money.
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