Managing Retirement Wealth

7 Tips for Managing Retirement Wealth Today

Updated on Aug 17 2018


Managing retirement wealth in the 21st century can be complex. The digital age is shifting the financial marketplace to leverage cloud, big data, mobile and social technology – which means it pays to be a digitally-enabled investor. On top of the complexity that computer automation is adding, the financial-services industry is constantly changing; which is why many investors are seeking guidance from expert wealth managers and financial planners for money-saving and growing tips.

Aside from getting expert financial guidance, here are a few tips to help you get organized and manage your retirement wealth so that your hard-earned money can be working for you — even if you’re no longer working.

1. Consider Downsizing Your House

Housing accounts for the largest share of spending in retirement for most seniors. In fact, according to the Center for Retirement Research, downsizing a $250,000 house for a $150,000 house puts cash in your pocket and frees up roughly $3,250 a year in taxes and upkeep.

In addition to the financial drain, a big house can also take a toll. Cleaning, yardwork and maintenance take time and energy. Downsizing your home can be the first step to a minimal and stream-lined life that frees-up time and saves money. You can save thousands of dollars a year in taxes, utility costs and insurance by downsizing. Not to mention, that’s all money you could invest in retirement.

2. Dial-Down Equities as You Approach Retirement

Many investors choose to keep the bulk of their financial portfolios in equities, but the reality is that your retirement money relies largely on the years just prior to retirement. Consider dialing-down equities to half or less of your portfolio as you near retirement as being more conservative during this time is important to mitigate risk.

3. Strategically Withdraw

Common advice for retirees is to withdraw 4 percent of savings the first year of retirement and then adjust for inflation. Economists warn that because of low yields, that’s too agressive today and that a 2.9 percent withdrawal gives you a 90 percent chance of a 50 percent stock / 50 percent bond portfolio lasting 30 years. Adjust according to your unique situation with the help of a financial planner or wealth manager, but remember that it’s important to protect your capital by spending less in bad market years.

4. Put Your Assets in the Right Place

Once you’ve maxed out your IRAs and 401(k)s, consider taxable accounts for the most tax-efficient investments in your mix. Talk to your wealth manager or financial advisor about index and buy-and-hold equity funds that trade infrequently and generate few capital gains distributions.

5. Assess Your Retirement Expenses

Everyone’s retirement expenses are different which is why online calculators and retirement income predictors can be misleading. Generally the calculators and assessment tools assume you are going to spend the same amount each year of retirement, adjusted annually for inflation. The reality of spending is that it often decreases with retirement, though. When working through your retirement budget, make a distinction between your projected discretionary and non-discretionary spend and seek help from a professional wealth managers or financial advisor, as needed.

6. Keep Working In Retirement

If you enjoy your career, consider working longer as your finances will benefit in the long-run. You will save more money for your retirement nest egg, not to mention you will get more money from your Social Security if you wait to retire as your payouts are based on your highest years of earning. For example, while you are eligible to claim benefits as early as age 62, your monthly check could be nearly twice as much if you wait until you’re age 70.

Even if you retire, taking a second, part-time job is a great way to earn extra spending money while keeping active in the community. Many seniors find retirement jobs enriching and fun—while greatly benefiting their pocketbook.

7. Avoid Taxes in Retirement

Taxes in retirement can put a big dent in your finances. You don’t have as many write-offs as kids are usually independent and your mortgage is often paid down. There are ways to pay less on taxes, though. For example, if you fall into the 15 percent tax bracket take advantage by selling your long-standing holdings with big gains as the long-term capital gains rate for those in this bracket or below is 0 percent. You can also consult an expert wealth manager or financial planner for additional tips on how to save on taxes.


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