Six Ways to Manage Your Money in Retirement

Six Ways to Manage Your Money in Retirement

August 29, 2023

In retirement, your income stream has usually dried up and keeping an eye on your expenses is vital to making your retirement funds last to the very end.

To help you better manage your finances during this time of decreased earnings, we offer the following pearls of wisdom:


Take Care of Your Body — Health care is one of the largest expenses in Americans' retirement years.

According to the Fidelity Retiree Health Care Cost Estimator, an average retired couple age 65 in 2022 may need approximately $315,000 saved (after tax) to cover health care expenses in retirement.

Of course, the amount you'll need will depend on when and where you retire, how healthy you are, and how long you live.

The best way to avoid getting clobbered by high health care costs is to take care of your own health.

If you smoke, it's time to quit. And stay active. Studies show that sedentary lifestyles are short ones. Staying active can prolong your life and lower your medical bills.

Get a Handle on Spending —Once you're retired, you can't just work overtime to make up for overspending.

To assist your budgeting, you don't have to do everything on paper anymore. There are several handy tech tools that can help you keep spending under control. A few examples of good household budgeting mobile apps or software packages include, and

Plan for Long-Term Care Needs — Medicare does not cover long-term care, including adult day care, assisted living or nursing home/custodial care.

The average annual cost of a semi-private room in a skilled nursing facility is $7,908 per month, according to the "Genworth 2021 Cost of Care study." That's $94,896 per year.

The need for long-term care for either spouse can potentially completely consume a pension or 401(k) incomes and can chew up everything you hoped to leave to your heirs. Consider having at least some amount of long-term care insurance coverage to protect yourself and your family from these potentially devastating expenses.

See a Financial Adviser — It's a good idea to spend time with a qualified financial adviser at least once per year.

We can help you review market conditions and make investment decisions based on rational considerations, not emotional ones. We can also help you stay on track with your retirement strategy, and help you avoid common tax or investment pitfalls that may hinder your long-term financial prosperity.

Diversify — It's important for retirees to keep their investments spread out among a variety of asset types.

You should have exposure to both guaranteed and non-guaranteed investment products, and across stocks, bonds, real estate, cash and cash equivalents and alternative asset classes.

If you are too heavily invested in any one asset class, a collapse in that class could put a serious crimp on your ability to fund a comfortable retirement.

Take Your RMDs — If you have assets in tax-deferred retirement accounts, you probably have required minimum distributions (RMDs) you must take. These are how the federal government sets a limit on how long you can defer taxes on gains and income in your retirement accounts.

Generally, you must begin taking RMDs (and realizing taxable income) by April 1 of the year after the year in which you turn age 73 under the Secure 2.0 Act passed in 2022. You must take your RMDs by the end of the calendar year for every year after that.

We can help you determine the minimum amount you must withdraw.

If you fail to take an RMD, the IRS will assess a penalty of 25% of the RMD you were supposed to take but didn't.

It's much cheaper just to pay the income tax.

We work with several quality professionals that can help you make informed decisions- call us for more information.