Turning 70 doesn’t magically flip a switch that makes money stress disappear — but for many retirees, it does come with a clearer sense of what works.
The “responsible” retirees in their 70s aren’t necessarily clipping coupons or obsessing over spreadsheets. Instead, they’ve settled into a handful of steady financial habits that help them feel comfortable, prepared and a little more relaxed about what comes next.
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“Responsible retirees in their 70s have a very clear goal: To make their money last,” said Dat Ngo, licensed certified public accountant (CPA) and personal finance professional at Vetted Prop Firms. “That’s why they know exactly where every dollar is going, and if they have to slow down their spending, they do so.”
Here’s a look at what those habits tend to be — and why they matter.
They Rely on Multiple, Sustainable Income Streams
To make both their income and savings go further, Ngo said responsible retirees don’t rely on a single source, which is extremely important.
“They combine fixed income with controlled withdrawals, always have some cash available, and thus avoid having to make impulsive moves, where you usually lose more than you gain,” he said.
What pays off in the long run is good planning. Nothing complex, just anticipating any expenses.
“The important thing is that it is sustainable, not that it is complex,” Ngo added.
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They Keep Short-Term Cash And Invest Conservatively
According to Ashley Akin, CPA, tax consultant specializing in tax compliance services, and the senior contributor at CEP DC, many responsible retirees also keep savings for costs lasting one year just in case.
The remaining funds are invested in bonds which serve as safe investments because this strategy allows them to avoid immediate sales of their long-term investments when market values decrease.
“The planning process helps them stay calm while they work to maximize their financial resource management,” Akin said.
They Time Withdrawals To Minimize Tax Surprises
From a tax point of view, Akin noted timing matters. When a retiree turns 73 years old, they have to start withdrawing money from certain retirement accounts, like IRA or a 401(k) account.
“This is called a required minimum distribution, [or] RMD,” Akin pointed out. She said the tax office will impose a major penalty on businesses that do not fulfill their tax duties properly.
“People who want to protect their retirement funds must take their entire required distribution amount. If they don’t need it all, they reinvest the extra in savings for grandkids in special accounts,” the CPA concluded.
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This article originally appeared on GOBankingRates.com: 3 Smart Money Moves ‘Responsible’ Retirees in Their 70s Always Do
