Six Ways to Manage Your Money in Retirement

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.

Get a handle on spending. To assist your budgeting, you don’t have to do everything on paper anymore. There are a number of 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 wipe out 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. There are other alternatives to traditional long term care insurance to help mitigate this issue. 

See a financial advisor — 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 an exposure to both guaranteed and non-guaranteed investment products.

Take your RMDs — If you have assets in tax-deferred retirement accounts, you probably have required minimum distributions (RMDs) you must take. 

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.

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