After a lifetime of hard work and disciplined saving, the newly retired bask in their newfound freedom and flexibility. However, retirement is not without its stressors, and one of the primary concerns for many is how to manage their retirement funds properly. Money management in retirement is centrally focused on extending the life of the funds while fully subsidizing the lifestyle of the retiree.
Those with both limited and plentiful retirement funds may require assistance meeting this main goal. In addition, they might face additional unexpected obstacles including insurance concerns, life-changing events, lessening cash stores and high taxes and fees. Should retirees depend on the advice of a certified financial advisor when presented with these challenges?
Every year brings new changes to Medicare. From rising out-of-pocket prescription expenses to complete shifts in plan coverages, retired seniors must always stay abreast of Medicare modifications to ensure they do not have a lapse in coverage when they need it most. A financial advisor will either be aware of these changes or refer the retiree to an insurance expert who can fully inform them of all alterations and assist them in coverage comparisons.
Divorce rates are growing among seniors. In 1990, only 10 percent of divorces occurred in those over 50. In 2011, 28 percent of divorces were between adults of at least 50 years of age. Divorce and the subsequent division of assets may drastically alter the financial picture for many retiring seniors. While they may have counted on their nest egg to last throughout their retired life, they may have to survive on substantially less.
In addition, seniors may wish to assist adult children struggling financially. The birth of multiple grandchildren can also change the individual’s lifestyle plans and asset allocation. Retaining a qualified financial professional can ensure retirees have swift access to personalized advice in all situations.
Many retirees depend on investments as a portion of their retirement income, to subsidize Social Security or pension benefits. Depending on the age and health of the retiree, a different investing formula should prevail. The individual may need significant cash stores easily accessible for their short-term plans rather than having all wealth tied up in investments. A financial advisor can create a structured retirement plan based on a timeline of their projected spending, making sure the retiree always has fast access to the cash they need while continuing to healthily invest a determined portion of their wealth.
Taxes and Fees
In an effort to stretch out all retirement funds as long as possible, seniors do not want to pay unnecessary taxes and fees on investments or withdrawals. Liquidating 401(k)s and traditional IRAs all have tax implications. Frequent stock trading can cut into the principal the individual wants to invest. Working with a professional advisor will eliminate a trial and error approach to finances. For seniors, each financial choice can have a serious effect not only on their retirement fund, but on the quality of life they enjoy throughout their golden years.
Consider consulting with a professionally certified financial advisor regarding your retirement money management.