I'm Nearing Retirement Having Met My Savings Goal. Now What?

Many people reach retirement age having fallen short of their personal savings goals. Data from Northwestern Mutual shows that the average 60-something has just $112,500 socked away for retirement. That's not a lot of money over what could be a 20-year window or longer.

On the other hand, if you start saving from a young age and invest your nest egg wisely, you may end up in the enviable position of having met your savings goal before retirement officially begins. And while that's a great position to be in, there are steps you might want to take to preserve your wealth.

1. Shift toward safer assets

So your goal was to have a $2 million IRA in time for retirement, and lo and behold, you've gotten there with a couple of years to spare. That's a great position to be in. But now, it's time to shift away from riskier assets, like stocks, and load up more of your portfolio with assets that are known to be more stable, like bonds.

Within the realm of bonds, you have choices. Treasury bonds are considered safe because they're backed by the full faith and credit of the U.S. Treasury. These bonds usually carry a 20- or 30-year maturity, and recent rates were 4.75. The interest on these bonds is subject to federal tax, but not state or local tax.

You could also buy corporate bonds, which are those issued by public companies. Those often have strong yields but there are no tax breaks involved.

Another option is municipal bonds -- those issued by cities, states, and other localities to fund public projects. You might earn a bit less interest from municipal bonds than corporate bonds, but that interest is always tax-exempt at the federal level. And if you buy municipal bonds issued by your home state, there's no state or local tax to pay, either.

2. Focus on stocks that keep paying

It's a good idea to keep some stocks in your portfolio even once you've met your retirement savings goal. But if you can identify strong companies that pay dividends, you'll put yourself in a strong position for retirement. That dividend income will get added to your portfolio, so you'll have even more wealth at your disposal.

However, one thing you don't want to do is invest in a given stock solely because it pays a large dividend. First of all, dividends aren't guaranteed. When you buy bonds, the interest rate you're promised at the time of your investment is guaranteed, but dividends work differently. A company could cut its dividend at any time or stop making those payments altogether.

Also, it may be that a stock is paying large dividends but isn't poised for growth. So what you might gain in quarterly dividends income, you might lose in the form of share price depreciation.

3. Have plenty of cash at the ready

Once you're no longer working, you may need to tap your retirement plan regularly to cover your living expenses. But liquidating assets at a time when their value is down could mean locking in permanent losses in your brokerage account -- and struggling financially due to leaving yourself with less money after the fact.

That's why it's so important to set aside enough cash savings to cover at least a full year of bills when you're near retirement. That way, you'll have the option to leave your portfolio alone when it's not a good time to be taking withdrawals.

One thing you may want to do with some of your cash savings (but not all) is set up a CD ladder. That way, you can earn a higher rate of interest on some of your cash, but you'll also be able to regularly access your money when you need it.

It's a great thing to meet your savings goal ahead of retirement. But now it's time to focus on preserving wealth to the best of your ability. Doing so could help you approach the end of your career with a lot more confidence.