Never Run Out of Money in Retirement

Check out Jeremy’s latest podcast on Spending Without Worry by listening on “Apple Podcasts” or “Google Podcasts” or read below for tips to Never Run Out of Money in Retirement.

#58 – It’s good to have a consistent income source during retirement that you can rely upon, no matter how the economy is performing.

Recently, we came across an interesting article on Kiplinger by Sandra Block, titled “How to Create Income for Life.”

As the title suggests, it’s full of strategies to create a consistent retirement income!

In this episode, Jeremy Keil discusses the key takeaways from this article, and how it’s aligned with Keil Financial Partners’ unique 5-step retirement planning process. He also discusses how you can cope with the uncertainties brought by today’s complex retirement planning landscape.

Jeremy discusses:

  • How to manage the stress of over- or under-spending in retirement
  • Tips to maximize your Social Security and pension (the best annuities you can ever get!)
  • Reasons to consider getting a part-time job during retirement
  • Efficient tax planning strategies that every retiree should know about
  • And more

Never Run Out of Money in Retirement

Many retirees are scared of either running out of money early or underspending and not fully enjoying their retirement.

Remember, you have worked hard throughout your life to accumulate your wealth. Now, in retirement, you deserve to spend it without worry!

That’s why we’ve put together 5 ways to help you spend more efficiently and maintain a consistent flow of income. Read on!

1) Wait on Social Security

Did you know that your Social Security payout grows by nearly 8% for every year you delay it?

So, if you turn to other investments for your current spending and let your Social Security grow, it can be more efficient for your overall spending.

Plus, it’s less stressful for you later into your retirement when you finally have Social Security as a consistent source of income.

Now, this doesn’t mean that you have to wait until 70 to take it. Analyze your current financial position, figure out how many years you can manage without Social Security, and let it grow for as many years as possible.

If you’re married, you and your partner can decide to take your Social Security at different times. In most cases, it’s better to delay the Social Security with a higher payout amount out of the two.

Delaying Social Security could also be beneficial from a tax planning standpoint.

If you want to learn more about how to maximize your Social Security benefits, check out our blog: 5 Steps for Making Smart Social Security Decisions.

2) Get an Annuity

Many clients ask us if they should get an annuity.

While annuities are a good source of consistent income, the first advice we give to our clients is to maximize their Social Security and pension.

Why? Because they are the best annuities that you can ever get for your retirement! With zero commissions, Social Security and pension serve as the low-cost, high-payout annuities you could find.

If you need additional income, that’s when you can start searching for other annuities.

Knowing that your annuities will provide a fixed amount of money every month, you can spend without the fear of running out of money!

To learn more about annuities, check out this recent article on Kiplinger: “Annuities: 10 Things You Must Know.”

3) Get a Part-time Job

What? A job during retirement? That’s right!

Here are some reasons why getting a part-time job during retirement is not as bad as you think:

  • If your partner is still working full-time while you have retired, you might not get to spend much time together. But if you start a part-time job, then your partner could also move to working part time!
  • Having a part-time job can keep you busy during retirement and help get rid of boredom.
  • If you retire before 65, you’ll not be eligible for Medicare yet. So, a part-time job can help cope with insurance expenses. Or even better, your employer might cover part of your insurance!

4) Add a Buffer

When the markets drop drastically, nobody wants to sell their investments at a low price.

But what if you absolutely need the money during a downturn?

During such a situation, you can utilize annuities or a reverse mortgage line of credit as a buffer to cope with short-term expenses, and return the payments as soon as the market recovers.

We provide an in-depth explanation of what Reverse Mortgages are, how they work, and their benefits in this blog: 5 Ways a Reverse Mortgage can Improve your Retirement.

5) Take Control of Your Taxes

You have a lot more control over your taxes in retirement than you think.

For instance, you can choose which account you withdraw your money from, as well as the timing of your Social Security and pension.

During years when you expect an overall low tax rate, you can utilize Roth conversions to lock in the lower tax rate.

After you turn 70½, you can also make qualified charitable distributions to achieve tax-efficient charitable giving. This allows you to transfer your IRA money directly to your favorite charity, tax-free!

There are several other strategies to improve your tax picture. We discuss it in this blog: 5 Ways to Improve Your Tax Picture in Retirement.

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We hope you found the above strategies helpful. Make sure you check out the resources below to learn more about worry-free spending in retirement.

If you have any questions regarding your retirement, investment, or tax planning, feel free to contact us!

Resources:

Connect With Jeremy Keil:

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Content

Results and figures presented within the above links are hypothetical, unaudited and are intended for illustrative purposes only.

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Keil Financial Partners assumes no liability or responsibility for any errors, omissions, or other issues with the links and their respective contents. This includes both the website content and any potential bugs, viruses or other technical threats.

No Tax Advice

Keil Financial Partners does not provide any tax advice. No information or results from the links should be interpreted as tax advice. Please seek guidance from a qualified tax professional for any and all tax-related matters.

No Investment Advice

The content and information provided through the links should not be interpreted as being investment advice or a recommendation of suitability for any particular security, portfolio of securities, transaction, or investment strategy, or related decision. Please seek assistance from a qualified investment professional for any and all investment matters.

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