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How to be a Good Money Manager in Retirement

If you reach retirement with a significant amount of assets, you’ve done a great job of saving and investing. But now comes another challenge – making that money last.

You might think that this task, as important as it is, won’t be as hard as accumulating the money in the first place. Yet, a sizable number of people have reached a different conclusion. In fact, 36% of retirees say managing money in retirement is more confusing than saving for retirement, and 56% say they wish they had budgeted for more unexpected expenses in retirement, according to the Edward Jones/Age Wave Four Pillars of the New Retirement study.

What steps can you take to help you become an effective money manager during your retirement years? Here are a few to consider:

  • Set your goals. Your money management needs will certainly depend, to some extent, on what your goals are for the coming years. Will you travel extensively? Stay close to home and pursue your hobbies? Or maybe even open a small business? Once you identify your vision for retirement, you can estimate how much it will cost, which will then dictate much of your spending and saving needs.

  • Stick to a budget. If you’ve followed a budget throughout your working years, there’s no reason to stop now – in fact, budgeting may be even more essential when you retire. Of course, you don’t necessarily want to force yourself to be as frugal as possible – after all, you worked hard, saved and invested so you can enjoy a comfortable retirement lifestyle. Look for reasonable cost-cutting opportunities, such as eating out less often or eliminating streaming services you don’t use.

  • Don’t underestimate health care costs. Even when you’re on Medicare and pay for supplemental insurance, health care costs could still be one of your biggest expenses during retirement. Initially, budgeting for $4,500 to $6,500 per person annually may be a good starting point for traditional health care expenses in retirement. However, depending on your health, prescription drug usage and other factors, your costs could be higher or lower. And you may also want to estimate long-term care expenses as part of your plan.

  • Look for senior discounts. Once you’re a senior, you may be able to find discounts on a wide range of items and activities, such as movies, transportation, groceries, gym memberships and more. By taking advantage of these discounts, you can save a surprising amount of money and ease pressure on your cash flow.

  • Establish a sustainable withdrawal strategy. For decades, you’ve been putting money into your IRA and 401(k). But once you’re retired, you will likely need to start taking withdrawals from these accounts. It’s essential that you don’t withdraw so much early in your retirement that you eventually run the risk of outliving your money. You may want to work with a financial professional, who can analyze your entire situation – assets, expenses, lifestyle, expected longevity, etc. – and recommend a sustainable withdrawal rate. Keep in mind that once you turn 72, you may be required to take out a certain amount each year from your 401(k) and your traditional IRA, so you’ll want to incorporate these withdrawals into your overall income strategy.

Do whatever it takes to become a good money manager during retirement. You’ll find that it’s well worth the effort.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC

Article Submitted by:

Todd E. Tidball, Financial Advisor, Edward Jones

18887 Highway 305, Suite 100, Poulsbo, WA


Susie Sanders, Financial Advisor, Edward Jones

802 E. 1st Street, Suite 2, Port Angeles WA


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