Money Management Tips for the Golden Years
In many ways, managing your money during your Golden Years will be somewhat easier than in the years before. After all, you only have the money that you have, which means your options are more limited. However, the rules related to money management have also shifted when you reach retirement age, which means things get more complicated and you have to deal with new taxes, costs related to a Medicare Supplement plan and more.
Regardless of if you find this to be easier or if it is more challenging, there are a few tips that can help you along the way. Keep reading to learn what those tips are.
Make Tax-Efficient Withdrawals
When you are working to manage your money during your retirement, you need to remember – every penny counts.
It’s also necessary to keep in mind that each of the retirement accounts you have is likely going to be taxed differently, which means you need to be strategic regarding when and how you take withdrawals from each. Some of the things you should remember when doing this include:
· Put a priority on making withdrawals for your required minimum distributions- these are the mandatory withdrawals you are required to make when you reach the age of 70.5.
· Think about using a Roth conversion to help spread out how and when you are taxed.
· Keep up with what you are withdrawing yearly and how the amount will impact your tax bracket.
There’s no question that taxes at any point in your life can be complicated and what is best for you may not be best for someone else. In most cases, working with a financial advisor who specializes in retirement finances will be beneficial.
Focus on Creating a Source of Income During Retirement
Have you worked to save money for your retirement years? If so, you have probably been worried about putting aside as much as you can and maximizing the returns on your investments.
However, when you actually retire, most experts are going to recommend that you focus less on these returns and more on how you can turn your retirement assets into real, retirement income. The fact is that research has shown that retirees who have taken the time to guarantee their retirement income are much happier and much less stressed than those who are making an unpredictable withdrawal from their various retirement accounts. One way to help t turn your retirement into a predictable stream of income is through annuities.
Be Willing to Make Trade-Offs
If you want to find a money strategy that works well during your retirement years, then having the “I want it now” mentality isn’t going to work out well. The good news is, if you are retiring, you probably know better. What you need to do is to focus on what is most important to you and you may discover that you are actually able to spend less overall.
While a trip to Europe may be nice, don’t compromise your food budget to make it happen – it’s just not worth it.
Making the Most of Your Retirement Finances
While most people look forward to their retirement years, if you are dealing with difficult financial issues, this may not be the case. Take some time to plan ahead and use the tips and information here to ensure you have the money and source of the money needed when you reach retirement age. Be sure to work with the professionals in the field, as well, as they are going to be able to provide you with more insight and help when it comes to your retirement finances.