Goals Change in Retirement
Transcript, 2 minutes 25 seconds, for use during week of March
Description: Penny and Susan discuss IRAs, investment portfolios
and planning for retirement
Announcer: Invest Wisely comes to you from Iowa State University
Extension through a grant from the Investor Protection trust,
providing investor education on the web at: investorprotection.org.
Susan: Penny, last time we met we talked about my employer’s
pension plan. I also have an Individual Retirement Account
and a few additional investments. When can I start withdrawing
from my IRA?
Penny: If you have a traditional IRA, you can begin taking money
out at age fifty-nine and a half with no early withdrawal penalty.
You’ll pay taxes on all of the amount you remove unless
it’s a nondeductible IRA. With non-deductible IRAs,
you can’t take an income tax deduction--your contributions
are with after-tax dollars. So when you withdraw from one
of these IRAs , you’ll pay tax only on the account earnings
that are withdrawn.
Susan: If I don’t need the money right away, can I simply
leave it and let it continue to grow?
Penny: You can wait until you are age 70 ½ but then you’ll
have to begin taking a minimum required distribution from your
traditional IRA. If you have a Roth IRA rather than a traditional
IRA, there is no minimum distribution requirement during your
lifetime and there’s no tax on withdrawals.
Susan: I also have a few individual investments. What
do I need to think about with those investments as I’m
planning my retirement?
Penny: You’ll find that investing during retirement is
a little different than investing for retirement. Specifically,
your investment goals will change.
Susan: I know I’ll be thinking about hanging on to what
I’ve saved once I retire.
Penny: Yes. When you invest for retirement, you may be
somewhat more aggressive, investing in a growth mutual fund,
for example, because you have time to ride out the ups and downs
in the market. But in retirement, you’re usually
more concerned with ensuring that you’ll have money available
when you need it.
Susan: And that the funds I have will last.
Penny: Exactly. However, you also want to invest at least
some of your portfolio with growth in mind. Investing too
conservatively may make it hard for you to keep up with inflation.
Susan: Thanks, Penny. You’ve been really helpful
Penny: You’re welcome. And remember, for more information
visit the ISU Extension website at extension.iastate.edu and
look for ‘Invest Wisely.’