The Risks of Spending Your Retirement Savings

Getty ImagesSpending your nest egg appropriately can be just as challenging as was saving it. After years of saving up for retirement, there will come a time when you need to start spending your nest egg. Drawing down your assets in an appropriate way can be just as crucial to your retirement security as saving and investing. Here are some risks to avoid when spending your retirement savings: Losses in retirement are especially problematic. You annual returns start to be very important in the years leading up to and immediately after retirement. When you are saving up for retirement, it's certainly better to get a 15 percent return than a 5 percent return or a loss, but over a 30-year career the returns of a single year won't make or break your retirement. However, returns make a much bigger difference once you start taking withdrawals from your investments, especially if you experience a decline it the early part of your retirement.