Here’s an interesting figure: 36% of retirees say managing money in retirement is more confusing than saving for retirement, according to a study by Edward Jones and Age Wave. How can you become a good money manager when you retire?
First of all, identify what retirement means to you. Will you travel? Stay home and pursue hobbies? Open a small business? Once you identify your goal, you can estimate how much it will cost, which will then dictate much of your spending and saving needs.
Next, establish a budget and stick to it. Look for reasonable cost-cutting measures when possible. And don’t underestimate your health care expenses – even with Medicare, you can spend several thousand a year out of pocket.
Finally, and most important, be careful how much you withdraw each year from your IRA and 401(k). It’s a good idea to create a sustainable withdrawal rate.
Do whatever it takes to become a good money manager during retirement. You’ll find it’s well worth the effort.
This content was provided by Edward Jones for use by Daniel Pellerin, your Edward Jones financial advisor at 189 East Main Street Suite G, in Newport, (802) 334-6261.