Back > Budgeting  > Retirees Must Be ‘CEOs’ of Their Personal Finances
Retirees Must Be ‘CEOs’ of Their Personal Finances

Retirees Must Be ‘CEOs’ of Their Personal Finances

Retirement means you have a lot more time on your hands to spend with your loved ones. It also means you have less money to spend since you’re no longer getting a regular wage.  While you may no longer be earning an income, it doesn’t mean you still can’t afford to do things and enjoy your retirement. It’s just that you need to take control of your finances.

Even if you planned carefully for your golden years, you cannot just put your personal finances on autopilot the moment you hang your work boots. You will still need to manage your income, expenses, and investments. “Just because you’ve retired does not mean you can retire from money management,” advises Robert Cavanagh, Senior Vice President, Investments at David Lerner Associates. “Regardless of whether you’re retiring early or on schedule, you require expert guidance to manage your nest egg,” Cavanagh states.

The problem is that most retirement-centric financial advice focuses on how to save and invest for a comfortable retirement. There’s not enough guidance on managing money as a retiree, which is why we have prepared this guide.

Here are 7 tips for managing your money post-retirement:

  1. Set Retirement Financial Goals

Many retirees tend to lose their sense of purpose and direction after retirement. Retirement can last a long time as many Americans live much longer than the average of 78.7 years. According to data from the US Census Bureau, the average length of retirement is 18 years.

This means you may need to make a few changes to your financial plan in the years ahead. It would be best to define the lifestyle you want to live during retirement. It could be traveling, returning to your hometown, pursuing an old passion, or anything!

By setting clear retirement goals, you can create a realistic financial plan that aligns with your retirement goals and accomplish them. Continue to review and adjust your financial plan as needed.

  1. Plan Your Budget

As mentioned, retirement often leads to living on a reduced income, which can result in your money becoming stretched. A budget will help you monitor your income (pensions, rent, income from retirement investments, etc.) and expenses (healthcare, traveling, eating out, etc.). If your expenses exceed your income, you can fill the gap by increasing your income or reducing your expenses. Expenses may be the part you have the most control over.

Let’s take housing, for example. Housing costs are a significant budget item for most retirees. To cut these costs, you can choose to relocate to another area with a lower cost of living. Alternatively, you stay in your current neighborhood but downsize to a smaller, less expensive home.

Pro Tip: The National Council on Aging has a benefits checkup site where you can check public programs that can help decrease your expenses.

  1. Trace Old Savings, Investments, and Pensions

If you’ve moved homes and forgotten to inform all of the various organizations of your new address, chances are you have bank accounts that you’ve forgotten about. Take time to trace old savings, investments, and pensions. These can help boost your income. If you’re fortunate, you will have several income streams in retirement. They might include income from your retirement accounts, a pension from a former employer, Social Security benefits, and maybe a paycheck from part- or full-time work.

  1. Put Your Savings in The Best Account

There are several bank accounts available. Saving money in the right savings account is key to a successful retirement. Research the interest rates and understand the fees. The interest rate on your savings account will determine how much your money grows over time. Ensure you compare interest rates across different savings accounts to find the best one for you. Some savings accounts come with fees, such as transaction or maintenance fees. Be sure to read the fine print before opening an account to avoid any surprises.

While at it, build an emergency fund for unexpected expenses that may arise, such as roof repairs or medical emergencies. Experts recommend having an emergency fund of either 1-2 years’ worth of your expenses or 6-12 months’ worth of your income.

  1. Make the Most of Your Investments

Do you rely on investments for your income? If so, then be aware that the income level may vary depending on how the investments are performing.

Retirees often transition to less risky, more conservative asset allocations as they age, emphasizing preserving their wealth more than growing it. Before you invest in something new, ensure you fully understand the risk involved.

As a rule of thumb, limit your exposure to equity mutual funds as you near retirement and instead go for schemes that invest in other safer asset classes.

  1. Be Tax Efficient with Withdrawals

Even when you’re no longer working, you’ll still owe taxes. Most retirement plan distributions are subject to income tax and may be subject to an extra 10 percent tax.

Each retirement account you have may be taxed differently, and you’ll want to be strategic with how and when you make withdrawals from every account. Investment Counselors recommend withdrawing from taxable accounts first, then tax-deferred accounts.

Defined contribution plans like 403(b) and 401(k) have different sets of rules. They allow penalty-free withdrawals as early as age 59.5, but some exceptions allow for earlier withdrawals. At age 73, you should start taking required minimum distributions (RMDs) using an IRS formula based on your age.

  1. Plan Your Estate

Estate planning is also a critical part of your financial planning in retirement. While it may be the last thing on your list of priorities, start thinking about what you would like to happen if you become terminally ill, how you’d like to spend your final years, and what you’d like to happen after you die. If you haven’t drawn up a will yet, it’s crucial you do it sooner rather than later.


After a long career, many people look forward to retirement. Retirement is a phase to enjoy the fruits of your labor and lead a fulfilling life. However, there are specific financial complications associated with no longer working. Whatever the size of your nest egg, retiring will likely mean big changes in your financial life. Use the above tips to be the CEO of your personal finances.

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Your Investment Counselor

Skip to content