12 rules for making retirement savings last

12 rules for making your retirement dollar last longer
12 rules for making your retirement dollar last longer

Kiplinger, one of my favorite personal advice sites, today offered 12 rules for making money, especially retirement savings, last. Nothing wrong with their advice, but it neglects what I think is one of the most important considerations -- how to keep Uncle Sam out of your pocket.

Here's what Kiplinger advises, plus some tax and other advice worth considering:

  1. Rent instead of buy. For most people at or near retirement that advice comes too late. Many of us have owned our own home for years. But if you're still paying on a mortgage, plan to pay it off as quickly as possible.

  2. Consider a Roth. Before you leap into a conversion, consider what Bankrate.com says about conversions. The first $20,000 of income that you take from a tax-deferred account, such as a regular 401(k) plan or traditional IRA, will be free of tax. So why pay tax upfront with a Roth if you have less than $400,000 in savings?

  3. Focus on stocks with dividends. This isn't a game for amateurs. Even Kiplinger warns that picking stocks that pay high dividends is more complicated than it sounds. Get knowledgeable assistance before you dump a lot of money in a stock that ultimately is going to be a loser.

  4. Keep cash for emergencies close by. When the stock market tanked in 2008, retirees who survived best were those who didn't have to sell stocks because they had a year or two worth of living expenses in cash. That gave their investments time to recover.