How to Protect Your Wealth for Retirement

A person never stops building financial plans budgets, and setting financial goals, even in retirement. After you’ve worked your entire life to acquire a certain amount of wealth, understandably, come retirement, you want to maximize what you have, continue to grow it, and extend its value. From how to make your money last to spending it wisely, various strategies go into protecting your wealth for retirement.

Whether you’re already there or merely thinking about your retirement years, here is how to choose what to do.

1. Set Up a High-Yield Savings Account

A high-yield savings account has no limits on how much you can withdraw and provides easy access to money when needed. While your wealth may be tied up in various investments, you always want to ensure you have some of it within reach.

A high-yield savings account may not offer the interest rate return alternate investments do, but it’s safe, secure, and easy to use.

2. Define How You Want to Live in Retirement

Budget out your retirement. Identify expenses and determine how much of your monthly wealth you need to withdraw to make your retirement work for you. By planning, you can look for opportunities and ways to make changes to ensure you are not exceeding your means or overspending.

If you decide you need more or less to make your retirement work, you can also see how this impacts your overall wealth.

3. Discuss Your Plans with a Family Office

Discuss your retirement plans and wishes with a family office. As financial advisors with a specific specialty in managing the wealth of high net-worth individuals within the context of family, they can assist in ensuring funds will be distributed as you wish, used to aid in common family objectives and be used to support the parties you identify.

4. Spend Your Wealth Smartly Now and Later

Too rapid spending puts your retirement at risk. Be more conservative with what you withdraw and how it’s spent. While it can feel exciting to splurge occasionally, if the price tag is too big or if the splurging is happening too often, this puts your wealth on the line.

A person’s retirement should ideally last 20-30 years. For this to work throughout your retirement, you want to withdraw 4-5% annually and cap your expenditures.

5. Be Prepared for Inflation to Hit Your Savings

If your wealth is locked in a savings account and you aren’t doing anything with it, expect inflation to gradually eat away at its purchasing power over the years.

As the costs of goods and services increase, the value of a dollar decreases. This makes it all the more important to consider what you can do with your savings to invest, grow, and continue growing it long into retirement so you do not outlive your savings.

6. Plan for Unexpected Costs

Just like in pre-retirement, you will encounter unexpected expenses. Particularly during retirement, your healthcare costs can soar. Medications. Medically-necessary treatments. Long-term medical therapies that can help improve quality of life.

Healthcare can be extremely expensive, so be ready to adjust your monthly budget as you go. Fortunately, with wealth, you may have the option to seek a range of care options that others do not have access to. However, it does come at a cost.

7. Invest Your Retirement Portfolio Wisely

No high-risk investments. Low-risk, smart, long-term investments likely to provide stable and reliable growth are where to set the parts of your wealth you want to put into the stock market.

Also, be sure to diversify what you invest. Put it in different stocks, ETFs, index funds, and more. If you are inexperienced with investing, speak with a financial advisor on how to craft a low-risk, high-reward retirement investment plan.

8. Invest in Index Funds

Index funds are mutual funds that track a specific market index. They are a diversified collection of stocks and bonds, typically tied to an index with historical trends that almost consistently show growth. While the buy-in is high for some index funds, they offer a better return after buying in than individual stocks. Index funds are one of the best ways to build or grow wealth for retirement on the stock market.

9. Don’t Rely Strictly on Stocks

As you will discover, talking it over with a family office or financial advisor, a stock portfolio can crash alongside the market even when diversified. As a retiree, you won’t be able to afford this to happen.

Have your retirement money lined up in non-stock investments as well. This may or may not include real estate, investments in businesses, and/or other low-risk, easy, and simple places to put your money that you have access to, no matter where the stock market goes.