Money Moves to Consider Post-Retirement

Many things change when you retire. Here’s how you can determine the best way to handle your assets and investments within this new framework. When you enter retirement, you’ll immediately notice two things: You no longer draw a salary, and you have more time on your hands. Use that time to effectively manage your finances to make sure you take care of yourself and your family over the long run.

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Post-Retirement Financial Management

Make two budgets.

During the first year of retirement, make two budgets. The first reflects your best estimates of income and expenses over the next 12 months. But don’t stop there: Create a pessimistic second budget that maps out a frugal lifestyle based on a smaller net cash flow than you anticipate. It might take a year to figure out the most realistic budget, so remain flexible until then.

Centralize and simplify.

Do you have savings and investment accounts at a variety of banks, mutual funds, and brokerages? Start by making a list of your assets and who they are with. Your financial advisor can review this list with you and help determine if consolidation is an option.

Reevaluate your assets.

You might live 30 or 40 years beyond your retirement date. The most important financial consideration is whether you will outlive your money. A serious reevaluation of your assets should help you understand whether they are deployed to last as long as needed. For example, you might consider converting certain assets to an annuity for the guaranteed income and potential death benefit.* I can show you the pros and cons of your various options.

Better than downsizing: rightsizing.

It certainly makes sense to shed expenses you no longer need. A smaller house or apartment not only saves you money each month, but it allows you to cash in on your current house’s appreciation. When you rightsize, you select a lifestyle that you can afford and that will make you happy. Your investments should reflect the cash needs for that lifestyle while managing the effects of inflation over the next several decades.

Be prepared for the challenges of retirement.

Once you retire, your well-being depends on effectively managing your money. Start now by contacting a financial advisor to get a complete review of your financial situation, and together you’ll be able to formulate a plan to manage the risk of outliving your money.

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*Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 591/2 are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Diamond Credit Union, Diamond Youniversity, and Diamond Financial Planning are not registered broker/dealers and are not affiliated with LPL Financial.

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This material was prepared for Diamond Financial Planning and does not necessarily represent the views of the presenting party or their affiliates. This information has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting, or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax, or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.


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The views, opinions, and ideas articulated in this blog are just that, and should not be construed as financial or legal advice. The writers of these blogs are educated on the topics they are writing about, but they are in no way licensed financial advisors or registered investment advisors. Diamond Credit Union is not responsible for any actions a person may take as a result of the information they read in one of our blogs.