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Money Matters: Advice for Recent Retirees

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Published: May. 24, 2022 at 1:15 PM EDT
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COLUMBIA, S.C. (WIS) - What advice could you give a recent retiree that would help them feel comfortable with pulling from investments for their paychecks?

Josh Bradley from Capital City Financial said that a lot of people think that when you retire, your bills automatically go away. Unfortunately, that’s not how it works.

When you’re working it’s pretty simple, you know how much you are going to make. In retirement, it’s more complicated than that; turning things into paychecks is one of the most complicated things you’ll have to do.

A lot of people revert to using their social security check because they understand that benefit or they draw from their after-tax accounts because it’s tax-free or not taxed as high as other accounts. However, simplicity is not always the best option.

What investment should a retiree tap into first?

Unfortunately, there’s no standard protocol for pulling from accounts however it does come down to a lot of factors like when you retire, how much you need or if you have a pension or not. For most people, spreading out those distributions across multiple accounts is usually best to keep their tax level stable.

Is there an investment that retirees should NOT tap into first?

In general, deferring social security as long as possible is usually best for most people but can be hard to do. Roth accounts or accounts that continue to grow tax-free, you want to allow those to grow as big as possible so that you can address big ticket items later on in life.

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