Planning for retirement is no walk in the park: You have pick a smart investment strategy, search out all the employer matches and other goodies that can boost your savings, and—lest you forget—squirrel away a good chunk of your income.
But building up a solid nest egg is only half the battle. Equally important, and perhaps even more complicated, is figuring out how to safely withdraw money from those savings.
Decisions on when to start taking Social Security, what to do with any defined benefit pensions, and how and when to draw down savings will all have a dramatic effect on the quality of your retirement life. And while almost all experts urge you to sock away as much as possible while you are working, there is no unanimity when it comes to your best plan for using that money in retirement.
"When you are saving for retirement, general guidelines can work pretty well. When you are heading into retirement, you want something specific to your situation," said Judith Ward, a senior financial planner with T. Rowe Price. "There isn't really a good place to go for guidance around this issue."
You may also be confronting a savings gap as your retirement draws near, making your drawdown strategy that much more important. A 2014 Employee Benefit Research Institute survey found that just 55 percent of respondents were somewhat or very confident that they would save enough for a comfortable retirement. And new data from EBRI found that among early boomers facing a retirement savings shortfall, the figure for each individual in a married household averaged $71,299, while for unmarried men it came to $93,576, and unmarried women faced a retirement savings shortfall of $104,821.