by Katie Maier, Central Planning, Wealth Enhancement Group

As you approach retirement, when and from where you take money becomes an important consideration when working out your retirement income. While working, you probably didn't think much about where you'd access needed funds. However, when you start relying more heavily on your savings for income, planning from where you take your money can be just as important as planning when to take the money.

Performance of your accounts can depend just as much on when you take money out of the account as where you put the money when it's in the account. Contrary to what your emotions tell you, it's better to take money out of the stock market while it is up than when it is down. Sure, you may miss some of the upside if you take money out while the market it growing, but you'll be locking in any gains you may have while hopefully avoiding realizing actual losses when the market is down. Having a good mix of cash, bonds and stocks will allow you more flexibility to use the money in your stock accounts when it is most advantageous to do so.

Ideally you should have your savings divided into (at least) three buckets: short term (1 to 5 years), medium term (up to 10 or 15 years) and long term (over 15 years). The sooner you will need to use the money, the more conservative the investment should be. In contrast, the longer the money will be sitting before it is used, or if you plan on never using the money, the more aggressive you may want to be in its investment. That way, in times of a down market you can leave your investment portfolios alone while taking money from conservative investments, allowing the equities to potentially recover with the market.