Three Retirement Tips for the New Year

As we get further into the new year, our thoughts need to be on more than just last year’s taxes. We should also be thinking about what we need to do to make our retirement the best it can be – whether we’re already retired or getting ready for the big event.

As I say all the time, retirement is not easy. In fact, it’s hard. There’s so much to figure out, like making our nest egg last, Social Security, Medicare and what in the world will we do with all that free time. It all points to the fact that we should never stop planning for retirement, even after we’ve already retired.

So, let’s celebrate 2018 with so tips to make your retirement go more smoothly for the New Year. And please, let’s not call these New Year’s Resolutions. That might make it easier for you to actually follow up and make good on these tips.

So here we go. Five tips for 2018 that will go a long way towards helping to ensure that you have a happy and successful retirement for years to come.

  1. Treat retirement like a puzzle, says Kirk Cassidy, president, Senior Planning Advisors and Strategic Investment Advisors in Farmington, Mich. “Windows have opened up for people in retirement to make changes and adjustments. The most critical tip I can give is to no longer make financial decisions in isolation. Your retirement plan needs to be considered like a puzzle. Each decision you make around investments should look at how does this piece fit into my retirement puzzle. You should take a holistic view. How does taking money on from this account affect taxation on my Social Security and my investments.”
  2. Differentiate between having investments and having an investment plan, says Kyle Rolek, a Philadelphia-based financial planner. “A good investment plan is so important to retirement planning today, yet many people haven’t considered basic questions like ‘which account will I pull income from first?’ If they can’t answer that, it probably means they’ve collected investments but they don’t have an investment plan, and they can be leaving a lot on the table.”
  3. Be more tax efficient. “Recognize that the more tax efficient you are, the less taxes you pay and the longer your money last,” says Cassidy. “You don’t have to take any more risk in market to make your money last. The biggest fear for retirees is outliving their money in retirement. If we can be more efficient about taking income at right time from right source, we can improve that outlook without any greater risk in stock market.”
  4. Plan to do something. There are so many people who had to find this out the hard way. The retirement of our fathers and grandfathers is no more. Baby Boomers set the world on fire with their activism, energy and fitness. They still see themselves as young and active. (60 is the new 40?) It’s not uncommon to see people working well into their 60s, 70s and even 80s. Many say they would go crazy if they stayed at home.

“Think about how you’ll maintain a sense of purpose in retirement,” says Rolek. “Maintaining purpose has been linked to better health and an increased life expectancy.”

It doesn’t have to be a job. It can be recreation, sports or even volunteerism. They key is to do something. And the payoff will be a healthier life, both physically and mentally, and a longer life.

  1. “When taking income early in retirement, take from account that has the least amount of volatility,” says Cassidy. “You run the risk of running out of money (if you withdraw from the more aggressive or volatile account).”

The reason for this tip. If you withdraw from a volatile account in a down year, you are basically locking in that loss. Look back to 2008 for reference. Those folks who cashed out in the downturn basically locked in those losses forever. Keep those more volatile accounts for long-term growth. For short-term and withdrawals, make sure you have more conservative, or less volatile investments.

It’s all good advice, and following any or all of these tips can help ensure that your money lasts in retirement, especially if you live a long life.


This article is for informational purposes only and is not intended to provide any specific tax, legal, or financial advice. Before making any decisions we recommend speaking with qualified professionals.