Many of us share a similar worry: will we have enough money to last through all of retirement? But with a few tweaks, a few strategies, and the ability to lean on your financial advisor, you can create a plan that you’ll feel confident will take you all the way. Check out these three tips to help your retirement savings outlive you, not the other way around.  

1. Identify Flexible Spending Categories

As you build your budget, organize it based on needs. Every single expense should be identified as either fixed or variable and essential or non-essential. For example, your housing expenses are likely fixed and essential. Food is essential, but it is a variable expense. A gym or country club membership may be fixed, but it is non-essential. Other forms of leisure or travel are likely variable and non-essential.

Knowing which expenses are necessary and which are flexible can relieve some of your concerns going into retirement. If you’re used to spending $8,000 a month, once you sort your expenses and discover that only $4,500 of them are truly necessary, it relieves a lot of pressure. 

Identifying these spending categories also allows you to make wiser financial decisions and adjust better to market conditions. If we enter a bear market and your portfolio is down, you can cut spending back to cover the necessary expenses you identified. Maybe you put off that big trip or eat out less. This can potentially keep more of your money invested so you can be better positioned if and when the market bounces back.  

2. Plan for Taxes

Unless all your money is in an after-tax account or Roth IRA, you’ll have to deal with taxes in retirement. Having your mortgage paid off before retirement is a common—and excellent—goal. However, don’t make the false assumption that no mortgage equals no payments. 

Part of your monthly mortgage payment may be going toward property taxes and homeowners insurance if you escrow. Don’t forget that you still have to pay these bills when your home is fully paid off, and these figures must be included in your budget (and remember that these numbers will be inflating over time as well). One way to handle property taxes and homeowners insurance in retirement is to set aside money every month, just like you did with your mortgage. This way, you will have the funds available when those bills are due.

Property taxes won’t be the only taxes you’ll owe in retirement. Distributions from 401(k)s and IRA accounts will most likely be considered taxable income. Even your Social Security benefits may be taxable, depending on your overall income. It’s critical that you withhold and pay the proper taxes so you don’t get into a large tax bill situation. A competent tax preparer can help with this.

3. Work With a Professional

However, it’s not enough to only work with a tax preparer during retirement. Be sure to also work with a competent financial planner—it can mean the difference between a retirement marked by fear and stress and one of confidence.

Yes, it’s wise to have a financial professional help you with your investments during this next stage of life—but don’t stop there. You need your professional to help manage not only your money, but also your entire financial life. 

At Rosemeyer Management Group, we understand the concerns people face as they plan for retirement. Not only do we answer your questions, we address the questions you haven’t thought to ask. To learn more, schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at payton@rosemeyermg.com.

About Payton

Payton Simon is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Payton spends his days providing in-depth investment analysis and aiding in the development of customized, comprehensive retirement, tax, and estate planning strategies to help his clients reach their retirement goals. Payton is passionate about doing his best for every client he serves and making sure they don’t have any blind spots or missed opportunities in their financial plan. He strives to do his part to close the financial literacy gap so people can feel confident and empowered about their financial future. Payton has a bachelor’s degree in finance with a minor in accounting from the University of Wisconsin-LaCrosse. Outside of work, Payton is active in his local Catholic parish and incorporates his faith into every aspect of his life. He loves spending time with his family and friends and is a sports enthusiast, playing golf, basketball, and baseball. To learn more about Payton, connect with him on LinkedIn.