Finally you're reaping the benefits of contributing to your 401(k) for all those years. As you start taking money out instead of putting it in, use the advice in the following list to keep your nest egg healthy:
Develop a strategy to deal with the taxman, because you will have to pay taxes when you take money out of the plan.
Consider keeping at least one-third of your money in stocks during your retirement years. Converting everything into fixed-income investments leaves your money vulnerable to inflation.
Don't ignore inflation. What costs $10,000 the first year you retire will cost $20,328 in your 25th year of retirement, assuming a modest 3 percent inflation rate.
Establish realistic investment return expectations (such as no more than 6 to 8 percent) during your retirement years. Don't be lured into high-octane stocks that may fizzle.
Plan to withdraw no more than 6 to 7 percent of your retirement account each year to reduce the potential of running out of money.
Consider selling your home and investing the proceeds, thus converting your home from an income consumer into an income generator. (You can rent a smaller place.)
Get professional advice, because you can't afford to make big mistakes at this stage of your life.