3 Tips for Preserving Wealth in Your Golden Years

May 18, 2023

After spending so much of your life saving for retirement, it may be challenging to transition from depositing funds to withdrawing them. You may wonder whether there is any way to maintain your lifestyle and preserve your wealth to pass down to your loved ones. It might be worthwhile to do some careful planning and ongoing maintenance. Here are three tips that may help you preserve wealth after retirement.

Make a Health Care Plan

Unless you are one of the few lucky enough to retire from a job that provides health care to retirees until Medicare eligibility, you need to have a plan for accessing and paying for health care during early retirement. Paying out of pocket for a high-dollar plan might significantly dip into your retirement savings at a time when you need these funds to keep growing.

You might purchase health care on the market through the Affordable Care Act, get added to your spouse's plan, or choose a part-time job that might help provide health care coverage. Having a plan and some alternatives for retirement health care might be one of the keys to preserving your assets until you access Medicare.

Test Your Retirement Strategy

Although you may be unable to predict what happens in retirement, here are some steps to consider before retirement to help test your strategy and make any necessary adjustments. Some of the unknown factors include:

• Living longer than expected
• Requiring long-term care
• Having a spouse who needs long-term care
• Undergoing a market downturn during the first few years of retirement
• Having to provide financial support to an adult child

Your financial professional may help you map out the likelihood of these options and some strategies you may use to deal with them, such as having an emergency fund, long-term care insurance, or a revised withdrawal strategy.

Consolidate and Balance Your Portfolio

If, like many, you opened multiple retirement accounts over the years, now might be the time to consolidate these assets into a single account with one provider. For example, you might convert multiple employers' 401(k) accounts into one 401(k). Additionally, if you hold several IRAs at different providers, you may convert them into a single IRA. However, there are often important tax considerations when managing retirement accounts, so it is a good idea to discuss your specific tax issues with a qualified tax advisor before making any major moves.

You may need to reevaluate your asset allocation as you enter retirement. Suppose you have had an aggressive, growth-focused portfolio for a long time; you may want to consider shifting into income-producing dividend stocks or other assets like CDs and money market accounts.

Generally, a mix of asset types is desirable, some assets with slow growth that may have the possibility of less risk, some that may grow more quickly (albeit with more risk), and some that provide a steady income. Again, your financial professional may work with you to develop a strategy to help manage your needs.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.

Asset allocation does not ensure a profit or protect against a loss.

This article was prepared by WriterAccess.

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