top of page
Search

Do's and Don'ts of Retirement

Most of the time I write my own content. But in my casual readings this week I found an article that gave some ideas that I couldn't have said better.

Knowing how to spend your retirement money is often harder and more confusing than knowing how to save it.


The basics for saving for retirement are pretty simple. For four, five or even six decades, you painfully learn how to spend less and save more. But once you reach retirement, there are few really good guidelines about how to wisely spend the money you’ve saved.


There is typically an initial three-to-five-year period of retirement "jubilation," where many retirees overspend, often with more frequent travel as they start checking off their "bucket list" goals. That’s usually followed by a longer period of "stabilization" — when spending normalizes for the next decade or so. The last spending period is usually within a "five mile" radius from home.  Most have knocked off much of their bucket lists and have slowed considerably.


The typical retired person who exercises regularly can save $2,500 in annual health care costs.


For guidance on how to spend money in retirement wisely, Ted Jenkin, CEO of XYGen Financial and two other investment advisers who specialize in retirement created a helpful list. Here are their Do’s and Don’ts:



DO put cash into one account to pay for your first year of retirement. Use money from that account to pay your credit card bills and other expenses so you can track exactly where your money is going said Jenkin. This technique also helps ensure that you only spend what  you can afford to in Year One of Retirement.


DO track your spending daily — using your bank’s app, said JB Bryan, owner of JB Bryan Financial Group of Richmond, Va. Alternatively, you can call the bank’s computer system daily — without ever talking to a real person — to check on your transactions and your account balance.


DO spend on learning. Continued education of any kind — from developing new professional skills to enhancing old ones — is almost always a positive way to spend retirement money, said Bryan. "If you’re expanding your knowledge, you’re going to have a more comfortable eighties," she said.


DO spend on relationship-building. Paying for travel to visit children, grandchildren, or old friends from high school or college — even out of the country — is often money well spent, said Mark Woodward, founder and CEO of KANA Private Wealth Group of McLean, Va.


DO spend money on activities that can improve your health. This includes health club memberships, exercise equipment and pool memberships and personal training, said Woodward. You’ll feel better, of course. But research shows that the typical retired person who exercises regularly can save $2,500 in annual health care costs, Woodward noted.


DO activities that bring you pleasure. Great experiences tend to bring far more happiness to retirees than accumulating lots of expensive stuff, said Jenkin. "If it’s between a Coach handbag and a great trip, go with the trip," said Jenkin.


DO spend money on technology training. The cost will likely pay itself back many times over, said Jenkin. Keeping up with new technologies can ultimately save retirees money, time and frustration, he added.


DON’T buy pricey, new cars. Buying assets which quickly depreciate is one of the dumbest things a retiree can do, said Jenkin.


DON’T over-support adult children.  If you indulge your grown son or daughter, your child will be less inclined to save and invest for retirement, said Bryan. "You hurt your children by not showing them how to be financially independent," said Bryan.


DON’T purchase lottery tickets. Bryan has several clients who spend hundreds of dollars weekly on them.  "It’s a terrible habit, and lately I’ve seen it more with women than with men," he said.


DON’T neglect to put money aside for one-time expenses, like a child’s wedding. "Too many retirees think about this only when it’s too late," Jenkin said.

 
 
 

Recent Posts

See All
Inflation? What's That?

This week I am going to try and explain some complicated concepts in the markets related to inflation and purchasing power. Sometimes...

 
 
 
SAVING AND PLANNING

Even if you truly love your work, the day will come when it’s time to punch out for the last time and start your retirement. When that...

 
 
 
Is life insurance killing you?

I recently spoke to an employee soon to be retiring from the VA.  He had a few questions about his life insurance coverage through FEGLI...

 
 
 

Comments


Publication of information on this website/blog should not be construed by any consumer or prospective client as a solicitation to effect or attempt securities transactions, or for the rendering of personalized investment advice for compensation over the Internet. Any subsequent direct communication with a prospective client shall be conducted only in states where ARW is registered with the Securities and Exchange Commission, or within those states where ARW qualifies for an exemption or exclusion from registration. A copy of Alpha Retirement Wealth’s, LLC written disclosure statement (Form ADV), which discusses ARW`s business operation, services and fees, is available upon written request and can also be accessed here on this website, FINRA’s and/or the SEC’s website. Visitors to the website acknowledge that different investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client`s or prospective client`s investment portfolio. No client or prospective client should assume that any information presented and/or made available on this website serves as the receipt of, or substitutes for, personalized individual advice from the adviser or any other professional. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and or strategies recommended and or/purchased by adviser) or product made reference to directly or indirectly on this website, or via link to any unaffiliated third-party web site, will be profitable or equal to corresponding indicated performance levels. Moreover, client or prospective client acknowledges that information with respect to newsletters or other commentaries provided by the investment adviser may be dated and no longer reflect the opinion of the adviser.

bottom of page