Turning 70 doesn’t magically flip a switch that makes money go away—but for many retirees, it comes with a clearer sense of what to do.
“Responsible” retirees who are in their 70s don’t necessarily clip coupons or dabble in spreadsheets. Instead, they’ve settled on a few solid financial habits that help them feel comfortable, prepared and a little more relaxed about what’s to come.
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“Responsible retirees in their 70s have a very clear goal: to finish their money,” said Dr. Ngo, a licensed certified public accountant (CPA) and personal finance professional at Weighted Prop Companies. “So they know exactly where every dollar is going, and if they have to slow down their spending, they do it.”
Here’s a look at what these habits are—and why they’re important.
To make both their income and savings go further, Ngu said responsible retirees don’t rely on one source, which is critical.
“They combine fixed income with controlled withdrawals, always have some cash, and thus avoid making impulsive moves, where you usually lose more than you gain,” he said.
What pays off in the long run is good planning. Nothing complicated, just an estimate of what the cost will be.
“The important thing is that it’s sustainable, not that it’s complicated,” Ngo added.
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According to Ashley Akin, CPA, a tax consultant who specializes in tax compliance services, and a senior contributor at CEP DC, most responsible retirees also keep the expense savings for only one year.
The rest of the funds are invested in bonds which act as a safe investment because this strategy allows them to avoid immediate sales of their long-term investments when the market value declines.
“The planning process helps them stay calm while they work to maximize the management of their financial resources,” Akin said.
From a tax perspective, Akin noted the timing issues. When a retiree turns 73, they must withdraw money from certain retirement accounts, such as an IRA or 401(k) account.
“It’s called the required minimum distribution, (or) RMD,” Akin pointed out. She said that the tax office will impose heavy fines on those traders who do not do their taxes properly.
