6 Top Tips for Financial Success in Retirement

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Retirement can be an exciting time. Perhaps you've taken up a hobby, moved to a smaller home closer to your children or finally have time to volunteer for an organization you're passionate about.  

Retirement can also be a scary time, filled with lots of unknowns, especially when it comes to making financial decisions.  

For starters, money is only one piece of the retirement puzzle. Older Americans should also prioritize their physical and mental health, finding purpose and relationships with family and friends, says Elisabeth Larson, a financial adviser at Edward Jones in Amherst, N.H. 

With this said, having a financial plan in place for retirement is key as this can lead to less stress, enabling you to enjoy your time. To help you prioritize your money matters, we've cut through the noise with our top tips to get your financial house in order in retirement. Read on to learn more. 

As we mentioned above, this is a key piece of financial advice for older Americans. Why? Because a financial plan — in writing — will help you have more peace of mind. "Without a plan, you really can't do anything else," says Calvin Perry, financial adviser at Prudential Financial in Raleigh, N.C. 

Larson agrees. "I think the most common struggle I see is confidence, particularly when people experience unexpected life events. Having a plan in place, talking through possible alternative or worst case scenarios in advance and partnering with someone you trust to modify the plan as life changes does so much to empower people to make better decisions in the face of adversity." 

While a financial adviser may not work for all older Americans, it's a good idea to talk through your financial plan with an advocate or someone you trust.  

"I do think sitting down with an expert who has helped hundreds if not thousands (of older Americans) talk through particular circumstances of their life can be incredibly helpful," says Larson.  

Retirement and finances are like everything else: People do better when they talk it through. Plus, if you do opt to work with a financial adviser, you can use this person as a sounding board and allow them to help you craft a plan around the life you want to design. 

There are as many ways to save money as there are to spend money. And effectively managing your money takes into account all aspects of your cash flow, including your budget, savings, spending and debt.  

"Life is rarely linear — your finances shouldn't be either," says Larson. 

For starters, financial experts recommend paying down as much debt as possible before retiring. Then, understand your current spending needs, taking into consideration essential costs like housing, transportation and health care. It's also important to reduce some of your biggest expenses, like insurance. To do this, you may want to work with an insurance agent, who can shop around for the lowest rates every few months. 

Apart from your necessary costs, it's also critical to consider your lifestyle and related expenses like travel and entertainment. Once you know your expenses and have a working budget, don't forget to factor in the cost of inflation. 

One more tip: Set aside cash for emergencies and unexpected expenses. In general, having three to six months' worth of expenses saved up is key in case of a medical (or other) emergency, explains Perry.  

Did you know that there are more than 10,000 programs that provide direct financial distributions to older Americans — and you may have the right to claim these? Some of these include discounts on over-the-counter medications and utilities, according to Sagewell, a personalized financial platform built exclusively for older Americans. 

In addition, you can also save money by enrolling properly in Medicare and other programs (more than 700,000 people pay a Medicare penalty each year because they didn't enroll correctly!)  

Here's one more thing you should know: You may need to take a Required Minimum Disbursement (RMD) across all of your qualified retirement accounts such as Individual Retirement Accounts. And if you don't do this? You may be subject to penalties. Instead of pocketing your savings, this could mean another bill to pay.

To ensure that you take advantage of all the savings you're entitled to and don't pay unnecessary taxes, we recommend seeking out a financial expert to offer you guidance. You can also work with a financial institution that understands your unique needs and can help you maximize your retirement savings while avoiding costly penalties. 

We get it: Retirement can feel like a roller coaster ride at times, filled with highs and lows. Navigating new payments, like Social Security and pensions, can seem overwhelming. Likewise, you've got to keep your eye on your spending and budget to live the lifestyle you want. 

Meanwhile, just when you might need a little guidance when it comes to banking, times have changed and that friendly teller at your bank may no longer work there. Not only that, but perhaps your brick-and-mortar bank has been replaced with, well, a bank of ATMs. Goodbye friendly teller.  

When it comes to your banking needs, you may simply want to talk to a human being or get extra help. Luckily, you do have choices. You can change banks, or if you're tech-savvy, maybe you don't mind doing everything online. But, you may also want to consider a bank account that is purpose-built for your retirement needs. Sagewell, for example, offers MyPaycheck, a singular paycheck that consolidates your Social Security, pension, 401(k) and other income sources. In fact, Sagewell's Retirement Success Advocates can help you create a simple and predictable bi-weekly paycheck that fits your budget and goals. You can even get your paycheck early. 

We wish we didn't have to include this tip but with almost $3 billion annually in fraud targeted at older Americans, protecting yourself — and your money — should be top of mind.  

Just recently, Perry at Prudential had to help a client navigate a scam. Someone had recommended a real estate investment and now they can't get their money back or see statements. Investing, banking and other scams sadly happen frequently, and this is why it's important for older Americans to work with companies and experts that can advise and protect them against financial scams and fraud.  

For instance, a Sagewell Retirement Success Advocate will help you identify and solve problems that can disrupt your financial well-being. You can even have the power to freeze or pause activity on your debit card at any time. 

While there is no singular way to effectively manage finances in retirement, we hope these tips help you focus on what's most important for you.  

Before we go, we'd like to leave you with this one final pro tip: As the famous saying goes: Time is money. And, as Larson at Edward Jones points out: While finances are important in retirement, so are family, health and purpose.  

By Sagewell Financial

Sagewell is the only one-stop-shop financial platform built using modern technology exclusively for older adults. We use innovative financial products and human support to help older adults get the most out of their retirement savings and entitlements.   

We take the guesswork out of retirement by putting all of the key retirement-related financial and health products under one roof. As a result, our retirees make more confident aging related decisions, worry less about financial exploitation and get more out of their retirement.