4 Smart Money Moves to Make in Retirement

Shawn Plummer

CEO, The Annuity Expert

Making the right money moves in retirement is critical to ensuring a comfortable future. First, you want to be sure you have enough money to cover your costs, but you don’t want to blow your savings too quickly. So here are four smart money moves to make in retirement!

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Organize your financial life so that you can live a minimally expensive lifestyle

It’s a good idea to stay organized as a retiree and consider how to make life easier. Begin by listing critical financial contacts, such as your financial advisor, accountant, lawyer, and insurance agent. Tell someone you trust who can assist with your finances if required.

Consider simplifying your financial policies and accounts next. Begin by making a list of your assets. This should include any bank accounts, retirement accounts, and insurance policies you have. Combine multiple checking or savings accounts at different banks if they exist to obtain the best service, convenience, and amenities available. Consider merging several IRAs into a single IRA if you have many IRAs or 401k plans.

Smart Money Moves

Build an Emergency Fund

One of the essential money-smart moves is to build an emergency fund. An emergency fund is a reserve for unexpected expenses such as medical bills, car repairs, or job loss. Without an emergency fund, you may rely on credit cards or loans, resulting in debt that takes years to pay off.

How Much Should You Save?

Experts recommend having three to six months’ living expenses in your emergency fund. This amount can vary depending on your circumstances. Calculate your monthly expenses, including rent or mortgage, utilities, groceries, transportation, and other necessary expenses, to determine how much you need to save.

Where to Keep Your Emergency Fund?

Your emergency fund should be easily accessible and not tied up in long-term investments. Consider keeping it in a high-yield savings account, which offers a higher interest rate than a traditional one.

4 Smart Money Moves To Make In Retirement

Create a Budget

Creating a budget is another crucial money-smart move. A budget helps you track your expenses and income, allowing you to make informed financial decisions.

How to Create a Budget

List your income and expenses, including bills, rent or mortgage, groceries, transportation, and entertainment. Next, subtract your expenses from your income to determine how much you have left over. You can then allocate this extra money towards saving or paying off debt.

Benefits of Budgeting

Creating a budget helps you identify areas where you can reduce spending, reduce unnecessary expenses, and save money for your future goals. It also helps you avoid overspending and accumulating debt.

Pay Off High-Interest Debt

High-interest debt, such as credit card debt, can quickly accumulate and become a significant financial burden. However, paying off high-interest debt is one of the most effective money-smart moves.

How to Pay Off High-Interest Debt

Start by listing your debts, including the interest rates and minimum payments. Then, focus on paying off the debt with the highest interest rate first while making minimum payments on the other debts.

Benefits of Paying Off High-Interest Debt

Paying off high-interest debt saves you money on interest payments, improves your credit score, and reduces stress and financial burden.

Invest in Your Future

Investing in your future is an essential money-smart move to help you achieve long-term financial success. Therefore, investing wisely and understanding the risks and potential returns is crucial.

Types of Investments

There are various types of investments, including stocks, bonds, mutual funds, and real estate. Consider your investment goals, risk tolerance, and horizon when choosing an investment option.

Benefits of Investing

Investing can help you grow wealth and achieve financial goals such as retirement or buying a home. It also helps you stay ahead of inflation and increase your net worth.

Money Moves

Reevaluate your retirement objectives

It doesn’t matter if you’re retired or not. However, it’s critical to evaluate your objectives regularly and see whether you need to adjust to achieve them. You’ll be able to ensure that you can do everything you want in retirement by staying on top of your finances and making minor budget changes.

Whether you want to go on a trip you’ve longed for or just get started in a new pastime, revisiting your finances periodically will ensure that you may do so without having to worry about running out of funds.

Consider assessing your spending after a year of retirement to see if you accomplished your objectives and if you overspent on something you shouldn’t have. This will allow you to see where your money is going and help you align the funds with your long-term goals.

Prepare the necessary estate planning documents

It’s wise to go through and update your estate planning documents after you’ve retired. One of the essential records to check is your will, which ensures that your money and property are given to beneficiaries as you intended. Make sure the wording in your will reflects how you’ve assigned assets in other documentation, such as insurance policies or retirement accounts, according to proper legal terminology.

You can write your own will or have a lawyer handle it. Living wills and trusts, power of attorney designations, and letters of intent are other estate planning documents that may be created or reviewed. For more information on estate planning, see our estate planning checklist items.

Select your beneficiaries

It’s critical to name a beneficiary so your money and assets go to the intended person if you pass away. A court will most likely determine what happens to your estate if you don’t name a beneficiary or the beneficiary is under 18 or deceased. In addition, if you don’t check on your beneficiaries, your funds and property may be given to someone else.

Ensure your beneficiary section is always completed and that additional contingent beneficiaries are named in case the primary one passes away before you. If anything happens to the persons listed as beneficiaries, check your retirement and insurance accounts and modify them if necessary.

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4 Smart Money Moves To Make In Retirement

Next Steps

By adopting a people-first approach to your finances and focusing on your goals, you can make informed financial decisions that will benefit you in the long run. Remember to stay disciplined and consistent with your money-smart moves, as they will add up over time and help you achieve financial stability and freedom. With these tips and strategies, you can take control of your finances and pave the way for a brighter financial future.

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Frequently Asked Questions

What is the $ 1,000-a-month rule for retirement?

When dividing a $240,000 retirement fund by 5%, your annual return will be $12,000 – or an average of $1000 monthly! This simple calculation has become one of the go-to methods to estimate how much money is necessary to retire comfortably.

Can you live off $3000 a month in retirement?

If your living costs are low and you supplement your income through employment or an extensive pension, retiring on such a sum is undoubtedly attainable.

How long will $500,000 last in retirement?

The 4% rule dictates that saving this amount for retirement could provide an annual income of $20,000 for 30 years or more. Placing the sum into an annuity guarantees a yearly salary of around $24,688 to those who retire at 55.

Can you retire at 60 with $300 000?

Yes, a median American household of 55-year-olds has saved an average of $120,000 and a net worth of $212,500 to retire. With your substantial sum – plus Social Security benefits – it should be easy to keep living life as usual after raking in roughly $50K each prior year before retiring.

Can I retire with only $100 000 in savings?

If you want to retire with just $100,000 in savings, the 4% rule can help guide your expectations. Withdrawing roughly $4,000 annually is likely impossible for anyone to live on comfortably. However, most retirees typically also receive Social Security benefits that supplement their income and make retirement more viable financially.

Can I retire at 62 with $500,000?

With $500,000 saved away, you can retire at 62! According to the Social Security Administration records, the average American receives a monthly income of $1,543. To give you an even clearer picture of how your savings could help fund your retirement dreams, we’ve included tables with an annuity with a lifetime income rider and SSI details.

How long would $300 000 last in retirement?

At a 4% withdrawal rate per annum, this sum could last up to 25 years. That’s $12,000 annually, which won’t be enough as the sole source of income unless supplemented with additional sources such as Social Security and owning your own home. However, if invested wisely, that number can go even further!

*Disclosure: Some of the links in this guide may be affiliate links. I may receive a commission at no cost to you if you purchase a policy. It helps us keep the lights on!

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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