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6 Money Management Strategies for Retirees

I spend a lot of time helping my clients prepare for retirement and making sure their nest eggs will last well into their 60s, 70s and beyond. Understandably many people focus their sights on that retirement goal, but the work doesn’t stop there. Retirees need to stay disciplined to maintain a comfortable lifestyle after they’re no longer earning a paycheck.

Here are some strategies for retirees to make the most of what they have saved and make sure it lasts.

  1. Create a budget. If you haven’t already, set up a formal budget and stick to it. It’s important to have it in writing--instead of a general idea of what you can spend--so you’re better prepared when unexpected expenses, such as health care costs, arise.
  2. Get rid of debt. If you brought any debt into your retirement, now is a good time to pay it down. Eliminating credit card debt should be a top priority. After the credit debt is gone, stick to using only one card and paying the balance monthly. When savings rates are as low as they are now, it makes sense to put your money to use paying off credit cards with high interest rates. Otherwise your debt can accumulate at a rate faster much faster than your savings.
  3. Invest in stocks that pay dividends. Once you’re no longer earning a paycheck, it’s difficult to get meaningful income from traditional sources. Blue-chip stocks that pay dividends are one option—there’s a bit more risk, but they offer a potential combination of reliable income and good odds for share price appreciation in the long term. I’ve written more on our website about why an equity income strategy makes sense.
  4. Plan your estate. A basic estate plan includes a will, living will, durable power of attorney and health care proxy. It’s a myth that you have to be a millionaire to have an estate plan—everyone can benefit from having their wishes down in writing. Because tax laws change and documents can become out of date, it’s a good idea to set up a review with an attorney and investment advisor to ensure all of your plans are current.
  5. Look into long-term care insurance. Almost 70 percent of people over age 65 will need long-term care services at some point, according to the U.S. Department of Health and Human Services. Think about getting a policy that would cover the services that private health insurance and Medicare don’t pay for—help with personal care such as dressing or using the bathroom independently. The healthier and younger you are when you look into it, the less expensive it will be.
  6. Donate to charity. In addition to being rewarding, giving to worthy causes as well as to your loved ones makes tax and financial sense. Keep in mind that you can make gifts of up to $13,000 annually without triggering taxes. Charitable gift annuities allow you to donate to a large charity and receive regular lifetime payments in return.

You can reach Robert DeNovo at 865-766-3005, robert.denovo@pnfp.com or 1111 Northshore Dr., Ste S130, Knoxville, TN 37919


*Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC, an independent broker/dealer and are not insured by the FDIC or any other government agency. Securities are not deposits, not guaranteed by Pinnacle Bank and are subject to risk and may lose value. Pinnacle Asset Management and Pinnacle Bank are independent of RJFS.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Robert DeNovo’s and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investments mentioned may not be suitable for all investors. Past performance may not be indicative of future results. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Dividends are not guaranteed and must be authorized by the company’s board of directors.

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