During your working years, you are (hopefully) putting money into your IRA and your 401(k) or similar employer-sponsored retirement plan. But once you’ve retired, how can you maximize the benefits you get from these plans?

First of all, you need to be aware of rules governing withdrawals from your retirement plans.

If you are older than 59½, you can withdraw money from your traditional IRA without paying penalties, though the withdrawals will typically be taxable. But once you reach 70½, you generally must start taking “required minimum distributions” (RMDs) from these accounts, with the annual amount determined by your age, the account balance and other factors. (The situation is different with a Roth IRA. If you are the original account holder, you are not required to withdraw funds from your Roth IRA at any age. You can choose to withdraw your contributions at any time, tax and penalty free. To withdraw your earnings tax and penalty free, you generally must have owned the account for at least five years and have reached age 59½.)

So, assuming you do have a traditional IRA and a 401(k) or similar plan, what should you do with the RMDs? You’ll probably require at least some of these distributions for your living expenses, but if you don’t need it all, what should you do with the “excess?”

Here’s one suggestion: As part of your overall retirement investment portfolio strategy, you can reinvest the money into these three “buckets”:

•Near-term income bucket — For this bucket, you’re not concerned with high returns — you just want the money to be there when you need it for expenses and unexpected costs, such as a major car repair, a new furnace, and so on. It’s always a good idea to have an emergency fund containing three to six months’ worth of living expenses — and your short-term income bucket could be an ideal source to help build such a fund.

•Medium-term income bucket — During retirement, you can probably never have too many sources of income, so you may want to fill a bucket with intermediate- and long-term bonds, which make regular interest payments.

•Long-term income bucket — Even when you’re retired, you will need some growth potential in your portfolio to help keep you ahead of inflation in the long run. So this bucket should be filled, not surprisingly, with growth-oriented investments. These investments can fluctuate in value, but as long as you don’t need to tap into them in a hurry, you may be able to avoid taking withdrawals when the price is down.

In addition to this “bucket” approach, you do have other options for your RMDs. For example, you could give your grown children some financial assistance, possibly for help in funding their IRAs. Or, you could contribute to a college-savings vehicle, such as a 529 plan, for your grandchildren. And you can always make charitable contributions, which allow you to support worthwhile organizations and, by doing so, earn some potential tax benefits.

Clearly, you can do a lot with your RMDs. And you worked hard for them — so make sure they work just as hard for you.

This article was written by Edward Jones on behalf of your Edward Jones financial adviser.

This article originally appeared on Crestview News Bulletin: How you should use retirement plan distributions

Editor’s Note: This continues our Celebrate Community series, which highlights nonprofit organizations that improve North Okaloosa County residents’ quality of life.

CRESTVIEW — The Homelessness and Housing Alliance makes funding decisions based on local people’s needs — and there’s no shortage of those.

The alliance's executive director, Sara Yelverton said, "We have a really large chronically homeless population. That's not a population many people want to serve, so what we've been doing is we're trying to assess and enroll them in housing programs."

The group offers two such programs: one for people who have lived on the street long term, and one for people who never should have become homeless to begin with, according to Yelverton.

"We're focusing on prevention and diversion, married couples without children, elderly and families. Once you get put out, it's very hard to find people to rent to you again. Although we need to deal with the chronic homeless, we also want to focus on prevention and diversion to keep them in the homes as much as possible. Childcare, food stamps, Medicaid — anything we can do to help them stay housed without ever becoming homeless is important to us," Yelverton said.

The HAA screens people and puts them on a waiting list while they assess housing needs, and determine who is most in need for housing that becomes available.

CONTINUUM OF CARE MEMBERSHIP

The alliance is the lead organization in a group of providers receiving U.S. Department of Housing and Urban Development Homeless Continuum of Care funding for Okaloosa and Walton counties. However, it faces some challenges.

"We can't really create a comprehensive system for the area if we have a large area under-represented (like Crestview and Destin) … Their homeless problems have increased because we haven't been getting enough services there."

Lack of representation, Yelverton said, leads to using jail as a shelter alternative. "We're spending a lot of community resources just cycling them through the jail and the hospitals, and it's not really having a positive outcome. We don't want to manage homelessness. We want to eliminate it altogether and get them back into (housing)."

As the administrative head of the continuum, the HHA distributes HUD funding to stakeholders with experience providing services to the homeless. Stakeholders include people and groups of all types, including faith-based organizations, hospitals, schools, health departments and other groups.

Membership costs $100 a year for groups and $50 a year for individuals. "We don't even require you to pay that fee," Yelverton said. "We want as many people as possible to apply."

Services eligible for funding include rapid re-housing, providing support services and permanent supportive housing for chronically homeless people, and HHA committees that develop strategic planning to end homelessness.

Any group, agency or individual that would like more information can contact the HHA directly at Sarah@hhalliance.org or 409-3070; or see www.hhalliance.org.

This article originally appeared on Crestview News Bulletin: Alliance provides funding, coordination for 'chronic' homeless problem

How much money will you need in retirement? To arrive at an estimate, you should consider various factors, such as where you’ll live, how much you plan to travel, and so on.

Not surprisingly, you’ll also need to think about health care costs, which almost always rise during retirement. But there’s one area you might overlook: long-term care. Should you be concerned about these costs?

In a word, yes. Expenses for long-term care — which can include receiving assistance at home as well as prolonged care in a facility — can be surprisingly expensive.

Consider the following statistics, taken from the 2016 Cost of Care Study issued by Genworth, an insurance company:

• The average annual cost for a private room in a nursing home is more than $92,000. And in some places, particularly major metropolitan areas, the cost is considerably higher.

• The average annual cost for full-time services of an in-home health care aide is more than $46,000.

These costs are certainly daunting. Of course, you might think that you won’t have to worry about them, because you won’t ever need any type of long-term care, particularly if you’ve always been in good health and your family has no history of later-in-life cognitive impairment.

However, the odds may not always be in your favor, because almost 70 percent of people turning age 65 will need some kind of assistance or long-term care at some point in their lives, according to the U.S. Department of Health and Human Services.

Given the costs of long-term care, and the possibility that you might really need this care, how can you prepare for the costs?

Things may change in the future, but at this point, you really can’t count much on government programs to help pay for long-term care. Medicare typically pays for only a small percentage of these costs, and, to be eligible for Medicaid, you must have limited income and assets. In fact, you might need to “spend down” some of your assets to qualify for Medicaid long-term care services. Obviously, this is not an attractive choice, particularly if you’d like to someday “leave something behind” to your family or favorite charity.

Consequently, you need to look at your options for paying for long-term care — just in case. You could earmark a certain percentage of your investment portfolio to cover long-term care costs; if you never need this care, you can simply use the money to pay for other areas of your retirement or for other purposes, such as charitable gifts or financial support to your grown children or grandchildren.

Or, as an alternative, you might want to work with a financial professional, who can recommend a strategy specifically designed to help you address long-term care costs. The marketplace in this area has evolved rapidly in recent years, so you should be able to find a solution that is both affordable and effective.

Keep in mind, though, that the earlier you purchase a long-term care solution, the more economical it will likely be for you.

In any case, don’t delay your planning for long-term care. Knowing that you’re protected against potentially catastrophic costs can make your retirement years less stressful for you and your family.

This article was written by Edward Jones on behalf of your Edward Jones financial adviser.

This article originally appeared on Crestview News Bulletin: Don’t overlook long-term care costs