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Nearing retirement

When retirement is coming into view, it's critical to assess where you stand today and maximize your savings & investing opportunities.

Preparing for the 3 stages of retirement

Your priorities, income needs and spending will likely change as you move through retirement.
Click through these steps to learn more about what you might expect in each stage. For insights on how to prepare, read the article.
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In the first stage of retirement, you might spend more time traveling, volunteer, move to a new location or work part time.

Don't forget

By making charitable giving a part of your financial plan, can help you maximize your impact on the causes and organizations you care most about, keep your finances on track and potentially realize additional tax savings in the long run. Learn more about charitable giving

Deadlines to know as you are approaching retirement

Rules and deadlines for Medicare, Social Security, IRAs and 401(k) drawdowns phase in starting at age 50.
Click on each age for important reminders. More detail can be found in the full article.
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Age 50

At age 50, you should consider taking advantage of catch-up contributions to your 401(k), IRA or Health Savings Account (HSA).

Did you know?

The SECURE Act 2.0 law offers powerful new ways to save more for retirement. Learn more about the SECURE Act 2.0 law

Make the most of tax-advantaged retirement accounts

Whenever possible, increase your retirement contributions up to the maximum allowed in your 401(k), IRAs or other qualified retirement plans. If you're age 50 or older, or turn 50 at any time during the calendar year, depending on the terms of the retirement plan, you may be permitted to make an additional catch-up contribution.
Image of the results page of the Personal Retirement Calculator based on hypothetical inputs. Image of the results page of the Personal Retirement Calculator based on hypothetical inputs.
For illustrative purposes only
Showing an example of the different hypothetical output from the Personal Retirement Calculator based on the following inputs: $80,000 income, $50,000 current savings, $1,000 monthly savings, moderate investment style, 90% projected retirement spending rate

Are you on track?

See where you stand in your retirement savings with our Personal Retirement Calculator.

Plan for future costs

Some expenses, such as healthcare, may be higher later in life, while others, such as commuting or clothing costs, may decline. What each person will need varies widely, but there are certain expenses we can count on.
Click through to how costs may change as you move through retirement.
Chart shows how retirement costs may change as you age. From ages 50 to 64, food represents 12% of total spending, clothing is 3%, housing is 33%, entertainment is 5%, transportation is 16%, healthcare is 9%, insurance/pensions are 13%, charity and gifts are 4% and other is 5%. From ages 65 to 74, food represents 13% of total spending, clothing is 2%, housing is 36%, entertainment is 6%, transportation is 15%, healthcare is 12%, insurance/pensions are 7%, charity and gifts are 5% and other is 4%. From ages 75 and older, food represents 12% of total spending, clothing is 2%, housing is 37%, entertainment is 5%, transportation is 12%, healthcare is 16%, insurance/pensions are 3%, charity and gifts are 9% and other is 4%.
For illustrative purposes only
Based on cost estimates from:
U.S. Bureau of Labor Statistics, "Consumer Expenditure Surveys 2021," September 2022
U.S. Department of Health and Human Services, "How Much Care Will You Need?," accessed May 2023

Did you know?

You can track your spending and look for savings opportunities with the Bank of America Spending & Budgeting tool.

How much could medical expenses be in retirement?

Premiums, copays and deductibles can add up. It's a good idea to explore what Medicare does-and doesn't- cover, estimate how much you may need to put aside for future healthcareFootnote 1 costs and develop a plan to help you get there.

Average annual healthcare cost by age

Graph shows how spending on healthcare changes based on your age group. Average annual healthcare costs by age. From ages 55 to 64, average annual healthcare costs are $6,093. From ages 65 to 74, average annual healthcare costs are $6,966. For ages 75 and older, average annual healthcare costs are $7,123.
Estimates based on U.S. Department of Health and Human Services, "How Much Care Will You Need?," accessed May 2023.

Don't forget

You can use funds from an HSA to help you pay for qualified medical expenses like deductibles, copayments and more. Learn more  about health savings accounts

Consider the costs connected to your home.

Among all the decisions you'll make as you approach retirement, perhaps the most important is where to live. It's more than a lifestyle choice — the decision should be a key part of your retirement planning.
For many people, their home is their largest single investment, so the decision — to keep or sell — opens up many financial questions. For that reason alone, where you choose to live takes on added significance through retirement.
Click through the options to see factors you may need to consider for each one.
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Staying put?

Consider things you may need later in your retirement, such as accessibility renovations, good public transportation or community and healthcare resources.

Don't forget

Whether you're upsizing or downsizing, be sure to consider taxes and the cost of living in a new area. Costs of goods and services can vary dramatically. Learn more  about taxes in retirement

Social Security: Aiming for smarter payments

Retirement income can come from many different sources. While Social Security will provide only a portion of your retirement income, it's an important component and should be part of your retirement strategy.
The older you are when you file for Social Security benefits (until you reach age 70), the greater your annual payment for the rest of your life.
This chart shows how the annual benefit amount can change for a retiree who is eligible to receive $24,000 per year at the Full Retirement AgeFootnote * of 67.

Did you know?

You can connect with a Merrill advisor to get guidance on creating an actionable retirement plan that works for you. Schedule an appointment with a Merrill advisor.

Factor in all of your potential income sources

When pulling together your list of income sources, in addition to Social Security, it may include a pension and retirement accounts — such as traditional or Roth 401(k) or 403(b) plan accounts, and traditional and Roth IRAs — and possibly even rental income and disability benefits.
If you're currently spending more than your projected monthly retirement income, consider adjusting your plans — by delaying retirement or taking on part-time work, perhaps, or moving the date at which you begin claiming Social Security benefits. You might also begin to look for ways to trim expenses or contribute more to your retirement savings accounts.

Review your income sources

For households age 65 or older, this is how a typical retirement income breaks down.
Chart shows retirement income sources for households age 65 or older. 28% is from Social Security, 26% is from personal retirement accounts, including traditional and Roth IRAs, 401(k)s, 403(b)s, pension plan payouts and annuities, 24% is from current employment earnings, 14% is from investments, 8% is from other sources.
Information from the Congressional Research Service, "Income for the Population Aged 65 and Older: Evidence from the Health Retirement Study," December 2022

Did you know?

To see where you are now and what you might need to change in the future, use the Merrill Personal Retirement Calculator

Develop a thoughtful withdrawal strategy

The rate at which retirees can prudently spend or draw down their investments in retirement and have them last their lifetime depends on age and risk tolerance. Adhering to these rates, as shown in this chart, will allow retirees to be 90% certain of not exhausting their wealth.
The advantage of looking at your income sources well in advance of retirement is that it gives you time to adjust your plans, if necessary. The longer you put off tapping into your retirement nest egg, the more likely your savings will last.
The following chart illustrates the systematic withdrawal rates based on a moderate level of confidence at your estimated retirement age.
Retirement Age (years)
Systematic withdrawal rates (%)
Retirement age 60
Withdrawal rate 3.88%
Retirement age 65
Withdrawal rate 4.14%
Retirement age 70
Withdrawal rate 4.44%
Retirement age 75
Withdrawal rate 4.86%
The systematic withdrawal rate is the maximum initial share of wealth that we believe a client can spend while attaining a desired "probability of success." The probability of success measures the likelihood that a retiree will be able to spend according to plan without exhausting her wealth. Spending is assumed to rise each year with inflation. The equity allocation is the allocation that we believe supports the systematic withdrawal rate. Numbers are subject to change.
Source: Anil Suri, Nevenka Vrdoljak, Yong Liu and Run Zhang, "Beyond the 4% rule, determining sustainable retiree spending rates," Chief Investment Office, January 2024.

Did you know?

When you start drawing down assets in retirement, the federal tax implications can be confusing. Here are some tips to consider when working toward creating a tax efficient strategy. Learn more about taxes in retirement

Portfolio diversification is still important as you near retirement

After you've addressed your short-term income needs, it's time to review your portfolio to see whether it has the potential to last 30 or more years, and then to adjust your asset allocationFootnote 3 as needed.
You may be tempted to play it safe at the beginning of retirement. Yet taking a cautious approach out of fear of stock market volatility might lead you to favor only lower-risk — and lower-yielding — investments such as bonds, CDs, money market funds and Treasury bills. And over a 30-year retirement, an all-cash portfolio may not be able to keep pace with inflation or rising healthcare costs. Diversification is vital.
This chart shows the potential risk of relying on cash. Over the long term, cash has kept up with rising prices, while stocks and bonds have delivered average annual returns that have exceeded the rate of inflation over this time period.

Returns after inflation 1926-2022

Graphic showing annual returns after inflation from 1926 to 2022. The return is 7.0% for stocks, 2.2% for bonds and 0.3% for cash.
Source: © Morningstar 2023 and Precision Information, dba Financial Fitness Group 2023. Stocks are represented by the Ibbotson® Large Company Stock Index, which tracks the monthly return of S&P 500. Bonds are represented by the 20-year U.S. government bond, cash by the U.S. 30-day Treasury bill and inflation by the Consumer Price Index. Assumes reinvestment of income and no transaction costs or taxes.
Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment.

Don't forget

A Merrill advisor can help you develop or refine your plan — connect with one today. Schedule an appointmentwith a Merrill advisor. You also have access to ongoing market updates and investing insights from Merrill. Learn more about investing insights

Protect your wealth and wishes

An estate plan describes your intentions so that others can know your wishes after your death, or if you are incapacitated. You may even need several types of documents to cover all of your bases. Birth, death and divorce and other life events can dramatically alter your intentions, which is why it's important to revisit your estate plan over time.
Reminder, the first and easiest step that can make a big difference in protecting your loved ones is to designate beneficiaries for your banking and investment accounts.
Click through the steps to learn more (you may want to consult with an attorney or tax advisor).
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Provide for dependents

Make sure you have at least a basic will that includes provisions for your dependents, such as naming guardians for minors, providing for children from a previous marriage, and specifically addressing the care and income of relatives with special needs.

Did you know?

For some people, the best approach may be to give during their lifetime rather than later. Learn more about giving an early inheritance

Managing through life's events

Throughout your life, you're going to experience important events — like getting married or divorced, having a baby, a job change — that will affect your finances. While some are planned, others are not. We're here to help you prepare for those critical times.

Getting married

Getting married or moving in together can be the start of an exciting new adventure. These resources can help you get ready for this new phase in your life.

Starting a family

The cost of raising a child continues to increase. Learn how to prepare financially and protect your growing family.

Getting divorced

Getting divorced can be a very stressful and financially complicated time. These resources can help you transition from "ours" to "mine" and "yours."

Losing a loved one

The last thing anyone wants to prepare for is the loss of a loved one. But there are important decisions to make, and planning ahead can help make this time a little less stressful.

Receiving an inheritance

Getting divorced can be a very stressful and financially complicated time. These resources can help you transition from "ours" to "mine" and "yours."

Your first job

Congratulations on reaching an important milestone. These resources can help you get your finances and working life off to a great start.

Changing jobs

A job transition means considering how you'll handle employer-sponsored benefits like retirement accounts, along with insurance and other perks.

Job loss

While it may be tempting to reach for retirement assets after losing a job, look for other sources that won't have an impact on your long-term plans.

Starting a business

Starting your own business can be exciting and challenging. Learn the basics of planning, preparing and launching your new endeavor.

Buying a home

Whether you're a first-time buyer or already own a home and are looking to refinance or make a move, there are a lot of financial considerations connected to homeownership. These resources can help.

Buying a car

A new car could be one of the most expensive purchases you make. Before you commit to the first vehicle that catches your eye, think about how to plan to use and pay for it.

Saving for a large purchase (travel, etc.)

Achieving a shorter-term goal like taking a vacation or buying a car calls for a disciplined savings approach. These tips and resources can help you get started.


If you're faced with taking on the responsibility of caring for an aging or ill loved one, these resources can help.
Investing involves risk including possible loss of principal. Past performance is no guarantee of future results.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
Footnote 1 This material should be regarded as general information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.

This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.

The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
You have choices about what to do with your employer-sponsored retirement plan accounts. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and different types of protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information visit our rollover page or call Merrill at 888.637.3343.
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Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp").
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