You Can Still Spend Money After Retirement: David Giertz Explains

Creating a sound retirement plan involves saving money, creating a budget and making arrangements for insurance requirements. However, a retirement strategy must also include spending some of the accumulated savings for daily needs along with pure, simple fun.

For many people, saving money becomes a habit that is difficult to break. At first, the thought of putting aside a few dollars for a rainy day is a difficult task. Nevertheless, saving money becomes easier as the habitual effect takes root. The main problem with saving thousands, or even millions, of dollars is that taking money out of a savings or investment account is often a scary event.

People who have saved millions of dollars are hesitant to spend any of their savings because they are used to living lives that are far from extravagant. One thing retirees need to learn is that it is perfectly fine to spend money without feeling guilty.

Even though most people are under the impression that Americans do not have any savings when they are ready to retire, the fact is that a surprising number of individuals have succeeded in saving small fortunes. These savers have most likely lived their lives without indulging themselves in extravagance.

Sacrificing cups of coffee at a local coffee shop in exchange for drinking brewed coffee in their kitchens is only one of the many ways to save money. Of course, luck also plays its role in the lives of many people who are trying to save money for their retirement years. Savvy investors need to have a certain amount of luck to realize their goals.

Unfortunately, some seniors are literally paralyzed by their own dreadful thoughts about possible future events necessitating the need for large sums of money. Even the most remote events provide logical reasons to avoid spending money from savings or retirement accounts. In most cases, these retirees are never going to use their money for pure enjoyment. Instead, they are bound to live their lives without fulfilling their youthful dreams.

Perhaps a retiree has always had dreams about traveling around the world and tasting ethnic foods prepared by famous chefs. Another retire may have had plans to go on holidays to exotic places once or twice a year. The bottom line is that too much prudence leads to an unsatisfied mind and a lifestyle devoid of passion and enjoyment.

According to financial advisor David Giertz, enjoying retirement entails a balance between saving money wisely and spending money with an equal sense of abandonment. The following advice offered by David Giertz suggests insight into how to live life in a responsible way without forfeiting the chance to have fun during the golden years.

1. Discipline is the key to a sound retirement. However, people need to implement different approaches based on their personal preferences. One person may want to travel the world alone while another individual may wish to spend time with the grandchildren. Another retiree may want to spend money on dance lessons several days a week.

2. Developing a retirement plan means deciding how much money the retiree wants to leave for his or her heirs. However, the plan must also include activities that were previously put aside due to work schedules and other demanding duties.

3. Creating a budget is a helpful tool for the retiree who is hesitant about spending money. A traditional budget serves many purposes. Retirees can learn to budget their money by setting aside funds for traveling and taking holidays. Once the figures are calculated, it is easier to spend money for pleasurable activities because the budget permits these expenditures.

4. Always have enough cash reserves on hand. One mistake often made by retirees is to invest every last penny in the stock market. Most retirees feel more comfortable and less stressful when they save some cash in liquid money market funds.

Cash reserves that are readily available without the need to sell shares prevent retirees from worrying about losing money. The important thing to remember is that retirement is not just about sitting back and waiting to grow old. Instead, seniors need to view their retirements as a way to reap the benefits of their previously disciplined lives.

David Giertz: A Man with an Impressive Financial Background

David Giertz is a financial advisor with more than 30 years experience in advising people about how to plan for their retirement years. Formerly the president of Nationwide's financial sales and distribution center, Mr. Giertz was largely responsible for directing the company on the road to successful financial gains. In addition, Mr. Giertz worked at Citigroup for 10 years as a financial advisor. Thanks to David Giertz, many retirees are living happy and productive lives during their retirement years without suffering from financial distress.

But that's not all you can do. The prospect of retiring is exciting for most people. However, it takes a lot of work to build up the financial security to afford retirement. Planning for a comfortable and secure retirement can be challenging, but it's within your grasp if you're cautious and prepared.

David Giertz, a financial service provider with 30 years of experience, suggests that individuals do the following five things in order to plan for retirement successfully:

Put a plan together for covering healthcare costs throughout your retirement

Healthcare tends to become an increasingly expensive cost as one gets older. While many Americans will be eligible for Medicare once they turn 65, it's important to understand that there may be a lot of healthcare expenses that Medicare won't offer coverage for.

For this reason, it's a good idea to start a health savings account to cover any expenses that may come up as you get older that Medicare won't cover. Additional coverage through Obamacare has previously been a possible means of providing coverage for anything that Medicare won't cover. However, without the individual mandate that has recently been repealed, Obamacare premiums are expected to increase significantly.

Shop around for annuities and evaluate their affordability

If you can afford an annuity, it's a good sign that you may be ready to retire. An annuity can ensure income throughout your retirement. If you purchase an annuity from an insurer who is reliable and well established, you can be insured regular payments.

Purchasing an annuity requires a lot of research. You're going to be relying on your annuity for income for a long time. Also, there are a lot of different types of annuities out there to choose from.

For the best results in your annuity purchase, you should rely on the expertise of an experienced financial planner like David Giertz. David Giertz recommends that the annuity type that's typically best for most retirees is a deferred fixed annuity. This annuity will pay out regularly- most often on a monthly basis- and will start paying on a date that is designated in the future when the annuity is purchased.

Be aware of IRS requirements

It's important that retirees are aware of the fact that the IRS requires retired individuals to withdraw certain amounts from retirement account annually once they turn 70 and a half. Retirees need to keep up with these requirements or they may face financial penalties. As retirees get older, they will be expected to take increasingly more money out of their retirement accounts. IRS requirements are calculate by referencing life expectancies.

The IRS has these requirements because the IRS expects tax payments on money collected from retirement accounts. Retirees need to realize that they're going to have to continue making tax payments throughout their lives even though they are no longer working. Crunching the numbers and calculating retirement expenses should include being aware of tax liabilities through the years. Taxes on retirement account distributions can reach a significant amount each year, and this amount will need to be paid to remain on good terms with the IRS.

Know how much social security you're eligible for

Social security continues to be a significant portion of retirement income for many Americans. The amount of social security you receive once you start collecting depends on how much income you've earned and how much taxes you've paid throughout your working life.

One important thing to realize is that you'll be able to collect more social security income the longer you wait to collect it. You'll receive the most social security income upon retiring if you don't retire until you reach what's considered to be full retirement age. Full retirement age varies for individuals depending on what year they were born in. Those born after 1960 don't reach full retirement age until they turn 67. Social security income can go up even more for those who wait until they are 70 to begin collecting.

It's best to wait to collect social security income if you can afford to do so. In any case, you need to find out exactly how much you're eligible for by visiting the social security administration website.

Think about the lifestyle you're envisioning for retirement

Some retirees have extravagant plans for retirement that involve traveling and making expensive purchases. Others are looking forward to a quiet and simple life at home. You need to think about how much money you'll need to cover your lifestyle while you're retired. If you're hoping to engage in expensive activities to keep yourself occupied during retirement, you're going to need to save up more than someone who is planning to stay put and be frugal.

Retirement works out best when individuals actually create a budget before retiring and think about how much they'll be spending on things like living expenses each year. You need to think about whether you plan to continue living in the same home or whether you want to sell your home and downsize. You also want to consider all the assets you have that you may want to sell upon retiring to simplify your life and fund your retirement.

Planning for retirement is a big job. You can benefit from the expertise of David Giertz to help you plan the retirement you've always dreamed of. David Giertz understands how strategy and organization are important in retirement planning and can use his years of expertise to set you on track to financial security after you decide to leave the workforce.

Follow David on LinkedIn, or read his interview on Ideamensch.


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