In her quest to promote financial literacy and make investing more accessible to all Americans, Carrie Schwab-Pomerantz authored The Charles Schwab Guide to Finances After Fifty, the recently released handbook to protecting and growing wealth in retirement. Schwab-Pomerantz is president of Charles Schwab Foundation and senior vice president of Charles Schwab.

How do you know if you've saved enough? What's the most common misconception about Social Security? What do you need to know about minimizing taxes in retirement? In this video segment Carrie Schwab-Pomerantz clears up some myths and offers valuable insight on maximizing income and minimizing taxes.

Brendan Byrnes: How does someone know if they've saved enough for retirement? Is there an easy calculation they can do, or is it complicated for each person? Is there a general rule of thumb?

Carrie Schwab-Pomerantz: Yes, we use a rule of thumb called 25X. What it means is, you need 25 times the amount of money that you'll need to withdraw from your savings or your portfolio. This is money that would be in addition to Social Security or other sources of income that you expect to have, like a pension.

For instance, if you want to draw $40,000 from your savings to supplement your Social Security, you'll need 25 times 40, which is a million dollars. That's a rule of thumb that we use, and it assumes a 30-year retirement.

Byrnes: What are some big mistakes that people make when it comes to retirement? Are there any things that you say, just, "Do not do this. Absolutely do not do this," and how can they avoid those things?

Schwab-Pomerantz: Of course there are a lot of mistakes. There are some myths and misconceptions, even for people who really think they know what's happening. For instance, a lot of people think, "As soon as I'm eligible for Social Security, I need to take it out." In fact, three-quarters of people at 62 years old take out Social Security, and they're leaving a lot of money on the table.

Now, granted, for some people it might make sense -- if they can't make ends meet or they have a health issue. But if you wait until your full retirement age, which is 66 or 67, depending on when you were born, your Social Security would be reduced 25% from the amount that you would get there.

Now here's another number that will blow your mind. If you wait from 62 to 70 to take out your Social Security, your monthly benefit will be 76% higher.

Byrnes: Wow.

Schwab-Pomerantz: Yes. It's definitely something to consider before just automatically taking it out at 62.

Byrnes: How about taxes? How can someone minimize their taxes as they're preparing for retirement?

Schwab-Pomerantz: Well, obviously there are different ways to prepare for taxes, like using your tax-deferred accounts, your Roth IRAs, your 401(k)s, and so forth. But in retirement, there are tax strategies to lower your taxes.

For instance, when you start creating that paycheck, you want to start with your bonds or your CDs that are maturing. Then you have to take out your RMD (your required minimum distribution) if you're 70-1/2, and you do have to pay taxes on that, but you'll be penalized greatly if you don't.

Then you want to go to your taxed accounts, because you get the capital-gain rate, which is lower than personal income. Then, lastly, go into your IRA and Roth IRA. That way, you can let your money grow tax-free for a longer period of time.

How to get even more income during retirement
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