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Chapter 20. And Now It's Time to Retire > Minimum Distributions - Pg. 202

And Now It's Time to Retire · · · · · · Forego early retirement. Delay Social Security benefits. Plan to work in retirement. Change you portfolio mix. Use personal investments first. Spend less. 202 Re-evaluate your portfolio. If everything is invested in bonds or money market accounts earning 6 percent, you may have to take a deep breath, gather up your courage, and enter the stock market. Over time, stocks have been the only investment vehicle to outpace inflation and taxes. A retiree's portfolio should have stock exposure of as much as 50 percent. But if you're conservative and you worry about your portfolio, don't do this alone. Seek out advice from a Certified Financial Planner. Plan to use up your personal savings and investments first, before you start to take money out of your qualified plans. The longer those dollars have the opportunity to compound tax-deferred, the bigger your retirement nest egg will be. Spend less, and your money will last longer. Sure, that seems obvious, but it may make more sense than you realize. Sit down with your budget and, if you're coupled, with your significant other, and look to see where you can begin to cut expenses. You laughed when we suggested that you stop eating, but you could certainly save by not eating out as much. And you can avoid getting into the habit of the many retired people for whom dining out is an important part of their social lives. How much can you afford to spend? The following table allows you to estimate what percentage of your portfolio you can withdraw and not run out of money. For example, if you have a portfolio made up of mostly bonds and a money market account, you can probably expect an average return of 5 percent after taxes. If the portfolio is currently worth $100,000 and you need it to last 25 years, you