The Never Retirement Plan: The Benefits of Continuing to Work by Choice

By Michael Ruger, CFP®
Partner and Chief Investment Officer at Greenbush Financial Group

As a financial planner, I spend a large part of my day helping people answer the question, “When can I retire?” Ironically, every once in a while a client turns that question around and asks me, “Mike, when do you plan to retire?”

To their surprise, my answer is always the same: “Never.”

That response tends to catch people off guard because you would think that, as a financial planner, my ultimate goal, like everyone else, would be to accumulate enough money to become financially independent and spend most of my day spending time with friends, family, travel, golfing, pickleball, in general, non-work stuff.

While I agree with the financial independence goal, I do not necessarily tie that too the common goal of full retirement. This place me in the unique Never Retirement Plan, which is the opposite of the new FIRE (Financial Independent Retire Early) movement.

However, “never retire” does not mean you have to continue to work 40 or 60 hours per week into your 70’s, 80’s, and 90’s. You may only be working 15, 20, or 30 hours per week and spend more time traveling, social activities, or hobbies.  Or maybe you completely change industries, start a small business, or join a not-for-profit organization.

Continuing to work offers benefits that extend well beyond a paycheck. In this article, we will review the potential health benefits of working later in life, the importance of the social interaction that work creates, the financial advantages of continuing to earn income, how working longer can benefit your family, and how financial independence may allow you to pursue projects or careers that you always wanted to explore.

We will also look at how artificial intelligence could make experienced workers even more valuable, the impact of additional compounding years on your investment accounts, and how continuing to work can become part of the legacy that you leave behind.

The Health Benefits Of Working By Choice

A friend of mine told me a story that I have always remembered. He was down in Florida, and he went to visit his doctor, who was 87 years old, and still practicing medicine.  My friend asked his 87-year-old doctor the obvious question, “What is the key to longevity?” The doctor's answer was simple: “Don’t retire.”

Obviously, one 87-year-old doctor is not a scientific study, but there is research showing an association between working later in life and longevity.

Researchers at Oregon State University studied 2,956 individuals who retired in the U.S.  Among the individuals classified as healthy retirees, retiring one year beyond age 65 was associated with an 11% lower risk of death from all causes. Even among participants who were classified as unhealthy retirees, working an additional year was associated with a 9% lower mortality risk.

There are a lot of possible reasons why work may have health benefits. Work keeps us mentally challenged. Work creates challenges that need to be solved, decisions that need to be made, and puts us in an environment of continuous learning. Work also brings social interaction with coworkers, clients, customers, and the general public.

There is also an important difference between working because you have to and working because you want to. If someone is 70 years old, financially independent, and absolutely miserable at their job, I am not suggesting that they keep working simply because there may be health benefits associated with staying employed.

The Never Retirement Plan is really about reaching the point where work becomes optional and then deciding whether some form of work still adds value to your life. Maybe you work three days per week instead of five. Maybe you stop managing employees and transition into a consulting role. Maybe you only work six months out of the year and spend the other six months traveling. Financial independence gives you the ability to redesign work around your life instead of constantly designing your life around work.

The Social Benefits Of Continuing To Work

One benefit of work that many retirees dramatically underestimate is the social interaction it creates.

Think about how many conversations you have during a normal workday. You talk to coworkers. You interact with clients. Someone asks how your weekend was. You hear about someone's kids, grandchildren, vacation, or new house. People check in with you when they know something is going on in your life. Those may seem like small interactions, but over a 30- or 40-year career, they become a major part of your social network.

Then one day you retire, and depending on what your retirement looks like, a large portion of that daily interaction can disappear almost immediately.

This matters because social relationships are strongly connected to health. A large meta-analysis published in PLOS Medicine reviewed 148 studies involving 308,849 participants. The researchers found that individuals with stronger social relationships had a 50% greater likelihood of survival during the study periods compared with people with weaker social relationships.

That certainly does not mean you have to keep working in order to maintain strong social relationships. Many retirees have very active social lives through family, friends, golf, pickleball, volunteering, religious organizations, clubs, travel, or community involvement. But work automatically creates a social network that many people do not fully appreciate until it is gone.

As financial planners, we spend a tremendous amount of time helping people determine how they are going to replace their paycheck in retirement. But it can be equally important for retirees to ask themselves how they are going to replace the social interaction that came with that paycheck.

If you already have a full calendar outside of work, that may not be an issue. But if most of your daily interaction currently comes from coworkers and clients, maintaining some type of work schedule after reaching financial independence may provide benefits that have nothing to do with money.

The Monetary Benefits Of Not Retiring

The most obvious benefit of continuing to work is that you continue to receive a paycheck. However, the purpose of that paycheck may change dramatically once you have accumulated enough assets to retire.

Before you reach financial independence, your paycheck is paying the mortgage, groceries, utilities, insurance premiums, college costs, and retirement plan contributions. Once you have accumulated enough money to support your lifestyle without working, the income from your job can become much more discretionary.

Maybe continuing to work allows you to take two large trips each year that you otherwise would not have taken. Maybe it allows you to buy a second home. Maybe you give more money to charity. Maybe you make larger gifts to your children or grandchildren. Or perhaps you simply continue saving and investing the additional income.

There is also a psychological benefit of continuing to receive income that I have observed many times as a financial planner.  No matter how much money some individuals have accumulated, there can be a tremendous amount of anxiety when the paycheck stops. 

Someone may have spent the last 35 years watching money go into their retirement accounts every month. Then they retire, and suddenly they have to reverse the process. Instead of money going into investment accounts, they now withdraw money from those accounts to pay monthly expenses.  Mathematically, their retirement projection may show that they are in excellent shape. They could have several million dollars saved and very little risk of running out of money. But psychologically, it can still be uncomfortable to watch those account balances fund their lifestyle.

We see this all the time when preparing retirement projections for clients. There is a difference between knowing that you can afford to withdraw money from your retirement accounts and actually feeling comfortable doing it.  If earned income continues, even on a part-time basis, it may reduce the amount that needs to be withdrawn from the portfolio and can make that transition into retirement much easier emotionally.

Financial Support For Your Family

This benefit is closely related to the monetary advantage of continuing to work, but I think it deserves its own section.

Let's assume you're 67 years old and your financial plan shows that you have enough money to retire comfortably. You don't need another paycheck to support yourself, but you still enjoy what you're doing and decide to continue working for another five years.

Those additional five years of income can create opportunities for your family that might not exist otherwise.

Maybe you help pay for your grandchildren's college education. Maybe one of your children wants to put an addition on their house because their family is growing and you're able to help fund the project. You may be able to assist a child with a down payment on their first house, help a family member start a business, or make annual cash gifts that remove some financial stress from their household.

This is where the financial planning question begins to change. Instead of asking, “Do I have enough money to retire?” you begin asking, “If I continue working, what additional opportunities can I create for the people that I care about?”

Obviously, you want to make sure your own retirement is secure before you start making significant gifts to family members. We never want someone jeopardizing their own financial independence in an effort to help the next generation. But once your own retirement is well funded, continuing to earn income can expand the number of people that benefit from your financial success.

The Freedom To Pursue Your Passions

This may be one of the most exciting aspects of the Never Retirement Plan.

Once you have accumulated enough money to retire, you don't necessarily have to retire from work altogether. Instead, you may have the ability to retire from the work that you had to do and begin doing the work that you want to do.

Let's say you've spent the last 30 years working in corporate America, but you've always wanted to open a Pilates studio. Maybe you're passionate about pickleball and you would enjoy teaching people the sport as a teaching pro at your local pickleball club.  Starting your own business take time, time that you may have never had before but now that you are not reliant on that small business to meet you expense needs, building a business can actually be fun instead of stressful.

If your retirement assets are already sufficient to support your lifestyle, your next career does not necessarily have to replace the income from your previous career. That can give you the freedom to focus more heavily on whether you enjoy the work and less on whether it produces the maximum possible paycheck.

There is one important warning that comes with this strategy. Financial independence does not mean you should put your entire retirement nest egg at risk trying to turn a passion project into a successful business.

If you have accumulated $2 million for retirement, that does not mean you should invest $1.5 million of it into a new pickleball facility. Before starting a business or funding a passion project, determine how much capital you are willing to commit and, more importantly, how much you could afford to lose without jeopardizing your retirement.  The goal is to use financial independence to create new opportunities, not put your financial independence at risk.

Why Retire When You're At Your Peak?

There is another unusual aspect of retirement that I think deserves more attention. Many people retire at the exact point when they may be the most valuable they have ever been in their profession.

Think about someone who has worked in the same industry for 30 or 40 years. They have experienced recessions, industry changes, technology shifts, difficult clients, failed projects, successful projects, and managing teams of people where trust has been built over decades of working together. 

Because they are so valuable to the company that they work for, in many cases, they are also earning the highest income of their career. Then they turn 65 and because many of their friends have begun to retire, they feel like that is naturally the next thing to do.

If you still enjoy the work, there is no rule that says age 62, or 65, or 67 has to be the finish line. Adding another five, ten, or fifteen years during what may be your peak earning years can have a tremendous financial impact.

But something else often happens later in a successful career. Your role begins to change. You may spend less time trying to advance your own career and more time helping the next generation advance theirs.  You become the go-to person for your team to assist in the knowledge transfer from one generation to the next. At this point, continuing to work is no longer just about the money that you're earning or what you are personally accomplishing. It becomes part of your legacy.

AI Supports The Never Retirement Plan

Artificial intelligence could make the Never Retirement Plan even more attractive over the next decade.

There is a common assumption that younger workers will have an advantage with AI because they tend to adopt new technology quickly. That may be true in certain areas, but I think there is another side to the equation.

AI can produce an enormous amount of work, but someone still has to know how to prompt the AI bot and be able to review the results being produced by AI for accuracy.

Take two people using the same large language model. One person has three years of experience in an industry and the other has 35 years of experience. The younger employee may be very efficient at using the technology, but the person with 35 years of experience understands where projects typically go wrong, which questions clients are going to ask, what assumptions need to be challenged, what risks need to be addressed, the logistics of implementing the solution, and whether there are errors in the results being produced by the AI model.

AI can help with research, first drafts, data organization, coding, presentations, analysis, and routine administrative tasks. The experienced professional can spend more of their time reviewing the output, asking better questions, making decisions, mentoring employees, solving higher-level problems, and maintaining client relationships. This could completely change what working later in life looks like.

Maybe someone who is 72 years old has no interest in working 50 hours per week anymore. But what if artificial intelligence allows that person to accomplish in 15 or 20 hours what previously required 50 hours?  Now you have an individual with 30 or 40 years of experience combined with technology that allows them to produce a tremendous amount of output without maintaining the same workload that they carried earlier in their career.  It could make highly experienced workers some of the most valuable people in the workforce.

More Compounding Interest

Now we get to one of the most powerful financial benefits of continuing to work.  Assume that you reach age 65 with $1 million in your retirement investment accounts. Your financial plan shows that you have enough money to retire, but retiring would require you to begin taking withdrawals from that $1 million to supplement your Social Security, pension, or other income sources.  What happens if you decide to continue working and your paycheck is sufficient to cover most or all of your living expenses?

Your $1 million gets more time to compound.

Using a hypothetical 8% annual rate of return, the Rule of 72 tells us that an investment would approximately double every nine years. In a simplified example, $1 million at age 65 could potentially grow to approximately $2 million by age 74 and approximately $4 million by age 83 if there were no withdrawals.

It may have taken you your entire working career to accumulate the first $1 million. But once you have accumulated a large asset base, each additional doubling cycle represents a much larger dollar amount.  The move from $1 million to $2 million creates another $1 million of wealth. The next doubling from $2 million to $4 million creates another $2 million of wealth. The approximate amount of time is the same, but the dollar amount created by the second doubling is twice as large.

There may also be an investment allocation benefit if you do not need to take withdrawals from your portfolio. Someone who is relying heavily on their investment accounts to support their lifestyle may need to keep more money in cash or bonds to protect against a major market downturn early in retirement. If your paycheck continues to cover a large portion of your expenses, you may be able to maintain a higher level of stocks in your investment portfolio, which may result in higher rates of return.

That does not mean everyone who continues working should invest aggressively. Your investment allocation should always be based on your risk tolerance, financial goals, time horizon, income needs, and overall retirement plan. But continuing to receive a paycheck can materially change the investment planning conversation.

Building A Legacy

Legacy does not necessarily mean creating a billion-dollar company or having your name on a building. Legacy is really about the lasting impact that you have on other people and the world around you.

Maybe you spend ten years helping a nonprofit organization grow and use the business relationships that you developed over your career to connect the organization with donors. Maybe you continue advancing your industry. Maybe you develop a product or piece of software that solves a problem, or you build a company that provides jobs for other families.

If you're 70 years old and you've accumulated 50 years of experience, there is an enormous amount of knowledge that you can pass on to someone who is 30 years old and just beginning their career. That person may eventually become a leader themselves and go on to mentor ten more people, and when later in life people ask them how they got where they are, they will often give credit to their mentors within the industry.

Continuing to work gives you more time to contribute your experience, relationships, knowledge, financial resources, and perspective to the people around you. For some individuals, that becomes much more important than accumulating another dollar.

None of this means that everyone should work forever. Some people cannot wait to retire. They want to travel, play golf, spend time with grandchildren, volunteer, or simply have complete control over their calendar. If that's your dream, that's a perfectly good retirement plan.  But other people reach financial independence and discover that they really do not want to stop working. They may want to work less. They may want more flexibility and control. They may want to eliminate the parts of their job that they no longer enjoy. But they still enjoy solving problems, helping people, building things, learning, and contributing.

For those individuals, retirement may never really be the goal.

A parting note….

The traditional retirement plan follows a fairly predictable path. You work for 30 or 40 years, save money, invest, reach retirement age, stop working, and then begin drawing down the assets that you accumulated during your career.  There is absolutely nothing wrong with that plan.

But financial independence gives you the ability to write a different one.  The goal of financial planning does not necessarily have to be getting you to the point where you never work again. The goal can simply be getting you to the point where work becomes optional.

Once you reach that point, you get to decide what comes next. You may continue working full-time because you enjoy what you do. You may cut your schedule in half. You may become a consultant, start a business, pursue a passion project, mentor the next generation, volunteer, or combine several of those things together.  Continuing to work can provide additional income, mental stimulation, social interaction, more opportunities to financially help your family, additional years of compounding for your investments, and more time to build a meaningful legacy.

If this sounds like your cup of tea, the next time a friend or co-working ask you, “when do you plan to retire?”, respond with a smile………Never.

About Michael……...

Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.

Frequently Asked Questions About Working in Retirement

1. What are the benefits of continuing to work after retirement age?
   Continuing to work after traditional retirement age can provide additional income, social interaction, mental stimulation, and a continued sense of purpose. It may also allow your retirement investments to remain invested longer rather than immediately relying on them for living expenses.
2. Is it better financially to keep working instead of retiring at 65?
   It can be. If employment income covers some or all of your living expenses, you may be able to delay withdrawals from retirement accounts and give your investments additional time to compound. However, the best decision depends on your income needs, investments, taxes, Social Security strategy, and overall retirement plan.
3. What is a "Never Retirement Plan"?
   A Never Retirement Plan is the idea of reaching financial independence without necessarily stopping work altogether. Instead, financial independence makes work optional, allowing you to continue working full-time, reduce your hours, consult, start a business, volunteer, or pursue work you find meaningful.
4. Can working part-time in retirement help my retirement savings last longer?
   Potentially. Part-time income can reduce how much you need to withdraw from retirement accounts each year. This may give your investments more time to grow and reduce your reliance on your portfolio during periods of market volatility.
5. Are there health and social benefits to working later in life?
   Work can provide mental stimulation, problem-solving, routine, and regular interaction with coworkers, clients, and customers. However, the article emphasizes an important distinction between continuing to work because you want to and continuing because you financially have to.
6. How does working longer affect investment growth in retirement?
   If your paycheck allows you to postpone or reduce portfolio withdrawals, your investments may have additional years to compound. For example, the article illustrates how $1 million invested at a hypothetical 8% annual return could approximately double every nine years under the Rule of 72, assuming no withdrawals.
7. What can I do instead of fully retiring?
   Retirement does not have to mean going directly from full-time work to no work. You could transition to part-time employment, consulting, seasonal work, volunteering, mentoring, starting a small business, or pursuing a passion project. The goal can be to design work around your life once you no longer depend on a paycheck.
8. How do I know if continuing to work in retirement is right for me?
   Start by determining whether you are financially independent and what role you want work to play in the next stage of your life. Consider your finances, health, family, social life, personal interests, and whether your current work still gives you purpose or enjoyment. For some people, the goal of retirement planning may not be to stop working-it may simply be to reach the point where working becomes a choice.

How Much Cash Should Retirees Keep in 2026?

Many retirees may want enough cash and short-term reserves to cover roughly 12 to 24 months of the amount they expect to withdraw from their portfolio, not necessarily 12 to 24 months of total household expenses. The right amount depends on Social Security, pensions, upcoming expenses, taxes, and how the rest of the portfolio is invested. Greenbush Financial Group generally views cash as part of a broader retirement income strategy designed to provide liquidity without leaving too much money out of the market.

How Much Cash Should Retirees Really Keep Outside the Market?

Retirement changes the role cash plays in your financial plan.

While you are working, a market decline may be uncomfortable, but your paycheck continues. In retirement, your portfolio may be providing part of that paycheck.

That creates an important question: How much should you keep in cash so you are not forced to sell investments during a bad market?

For many retirees, a reasonable starting point is 12 to 24 months of planned portfolio withdrawals, plus money for emergencies and known near-term expenses.

The key word is portfolio withdrawals.

Don't Base Your Cash Reserve on Total Expenses

One of the most common rules of thumb is to keep one or two years of expenses in cash.

That can result in holding much more cash than necessary.

Example

Assume a retired couple spends $100,000 per year.

They receive:

• $55,000 from Social Security

• $15,000 from pensions

• $30,000 from their investment portfolio

Their total spending is $100,000, but the portfolio only needs to provide $30,000.

Two years of total expenses would mean holding:

$200,000 in cash

Two years of expected portfolio withdrawals would be:

$60,000 in cash

That is a major difference.

Key Insight

Start by calculating your retirement income gap:

Annual spending - Social Security - pensions - other reliable income = amount needed from your portfolio

That number is usually more useful when determining how much cash to keep.

Should Retirees Keep One, Two, or Three Years in Cash?

There is no universal answer.

For many retirees, 12 to 24 months of portfolio withdrawals can provide a useful cushion.

You might consider holding more if:

• Most of your income comes from investments

• You have large expenses approaching

• Your portfolio has a higher stock allocation

• You are delaying Social Security and temporarily withdrawing more

• Having additional reserves helps you remain disciplined during market declines

You may be comfortable holding less if Social Security and pensions cover most of your essential expenses or if your portfolio contains a substantial allocation to high-quality bonds.

Cash should also be considered alongside the rest of your portfolio. A retiree with 50% of a portfolio already invested in bonds may not need the same cash reserve as someone with a much more aggressive allocation.

How Does Cash Help During a Market Crash?

Cash does not prevent investment losses.

What it can do is give you time.

Suppose you need $40,000 per year from your portfolio and have $80,000 in short-term reserves.

If stocks decline significantly, you may be able to use those reserves for your planned withdrawals instead of immediately selling stocks after they have fallen.

This can help address sequence of returns risk.

Sequence of returns risk is the danger of experiencing poor investment returns early in retirement while simultaneously withdrawing money from the portfolio.

Selling investments after a significant decline means fewer shares remain invested to participate in a future recovery.

A cash reserve gives retirees another source of money during those periods.

The objective is not to predict when the next market crash will occur. It is to structure your retirement income so that a market decline does not automatically force you to sell long-term investments at an unfavorable time.

Can Retirees Keep Too Much Cash?

Yes.

Cash feels safe because its balance does not typically fluctuate like stocks. But holding too much cash creates different risks.

Inflation Risk

If living costs rise while a large amount of money remains in cash, its purchasing power can decline over time.

Opportunity Cost

Money held in cash is not participating in the potential long-term returns of the investment portfolio.

For example, assume you need $40,000 per year from your investments.

A two-year reserve would be approximately $80,000.

If you instead keep $200,000 in cash, the additional $120,000 represents another three years of withdrawals sitting outside your long-term portfolio.

That may be appropriate if the money has a specific purpose. But if it is being held indefinitely because the market "might go down," you may be sacrificing too much long-term growth for short-term stability.

Important Note

Retirement can last 20, 25, or 30 years or longer.

The goal is not to eliminate investment risk. It is to balance short-term stability with the long-term growth needed to keep pace with inflation.

Where Should Retirement Cash Actually Sit?

Not every dollar needs to sit in a checking account.

Different types of cash and short-term investments can serve different purposes.

Checking Account

Best for monthly bills and immediate spending.

You generally only need enough here to comfortably manage normal cash flow.

High-Yield Savings or Money Market Deposit Account

These accounts can be useful for emergency funds and reserves that need to remain readily accessible.

At FDIC-insured banks, eligible deposits are generally insured up to applicable FDIC limits.

Money Market Mutual Fund

Money market funds are commonly used inside brokerage and retirement accounts for short-term reserves.

They are investment products, not bank deposits, so they are not FDIC-insured.

CDs and Treasury Bills

Money that will not be needed immediately may also be held in CDs or short-term Treasury bills.

For example, you might keep:

• Immediate spending needs in checking

• Emergency reserves in savings

• Additional planned withdrawals in short-term Treasury bills or other appropriate short-term investments

The objective is to keep the money accessible while still being thoughtful about where it is held.

Emergency Money and Retirement Income Reserves Are Different

It can help to separate two different types of cash.

Emergency reserves are for unexpected expenses.

Examples include:

• Home repairs

• Vehicle expenses

• Insurance deductibles

• Unexpected family needs

Retirement income reserves are for expected portfolio withdrawals.

For example, a household might maintain:

• $25,000 emergency fund

• $60,000 representing two years of planned portfolio withdrawals

Both are cash reserves, but they have different jobs.

This distinction can make it much easier to determine whether you are holding too much or too little.

Don't Forget Taxes When Setting Your Cash Target

Cash can also create valuable tax-planning flexibility.

Retirees frequently have money spread across:

• Traditional IRAs

• Roth IRAs

• Taxable investment accounts

• Bank accounts

Where retirement spending comes from can affect taxable income.

For example, a recently retired couple may want to complete Roth conversions before required minimum distributions begin.

Having sufficient cash outside the IRA could allow them to cover living expenses and potentially pay the tax associated with the conversion without taking additional taxable IRA withdrawals.

Cash planning can therefore affect:

• Roth conversions

• Medicare IRMAA premiums

• Social Security taxation

• Required minimum distributions

• Capital gains

• Estimated tax payments

At Greenbush Financial Group, this is why we generally look at cash reserves together with the household's investment, income, and tax strategy.

How Should You Refill Your Cash Reserve?

Your cash target does not need to remain static.

There may be opportunities to replenish it throughout retirement.

For example:

• After strong stock market performance

• When rebalancing the portfolio

• As bonds, CDs, or Treasury bills mature

• When required minimum distributions are taken

• When dividends and interest accumulate

During a strong market, you may sell appreciated investments and refill the reserve.

During a significant decline, you may spend from the reserve instead.

This is not about trying to time the market. It is about having flexibility over which assets you sell and when.

Common Cash Mistakes in Retirement

1. Keeping Several Years of Total Expenses in Cash

Social Security and pensions may already cover a large portion of those expenses. Focus on the amount the portfolio actually needs to provide.

2. Keeping Too Much in Checking

Money that will not be needed immediately may have better short-term options.

3. Ignoring the Bond Allocation

Cash is only one part of the conservative side of a retirement portfolio. Bonds may also provide stability and liquidity.

4. Moving to Cash After the Market Drops

Building a large cash position after investments have already declined can mean selling at an unfavorable time. Cash reserves are most useful when established as part of the plan beforehand.

5. Never Reassessing the Cash Balance

Cash can accumulate from distributions, dividends, interest, and asset sales. Review the balance periodically so the portfolio does not unintentionally become too conservative.

A Simple Framework for Retirement Cash

Rather than choosing an arbitrary percentage of your portfolio, consider four questions:

1. How much do we spend each year?

2. How much is already covered by Social Security, pensions, and other reliable income?

3. How much will we need from the portfolio over the next 12 to 24 months?

4. Do we have major expenses or tax payments coming up?

Then add an appropriate emergency reserve.

This produces a cash target based on your household's actual needs instead of a generic rule.

Final Thoughts

For many retirees, the right question is not:

"Should I keep one year or three years of expenses in cash?"

It is:

"How much money do I need available so I am not forced to disrupt my investment strategy at the wrong time?"

Holding too little cash can create problems during a market decline. Holding too much can reduce long-term growth and expose more of your savings to inflation.

The appropriate balance depends on your income sources, spending, taxes, portfolio allocation, and upcoming financial needs.

Greenbush Financial Group generally approaches cash as one piece of the retirement income plan. When cash reserves, investments, Social Security, taxes, and withdrawals are coordinated, retirees can have a clearer process for deciding where their next dollar of retirement income should come from.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

Frequently Asked Questions

1. How much cash should retirees keep?
   A common starting point is enough cash and short-term reserves to cover approximately 12 to 24 months of expected portfolio withdrawals, plus emergency savings and known near-term expenses. The appropriate amount varies by household.
2. Should I keep three years of expenses in cash during retirement?
   Not necessarily. If Social Security and pensions cover a significant portion of your expenses, three years of total spending could result in holding much more cash than needed.
3. Is holding too much cash bad in retirement?
   It can be. Excess cash may lose purchasing power to inflation and can reduce the long-term growth potential of the portfolio.
4. Where should retirement emergency money be kept?
   Depending on when the money will be needed, options may include checking accounts, high-yield savings accounts, money market accounts or funds, CDs, and short-term Treasury bills. Liquidity, insurance protection, taxes, and yield should all be considered.
5. How does cash protect retirees during a market crash?
   Cash can provide a source for near-term spending so retirees are not automatically forced to sell stocks after a significant market decline. This can help manage sequence of returns risk.

What Retirees Regret Most About the First 10 Years of Retirement

Ask retirees what they wish they had done differently, and you'll hear many of the same answers.

Rarely do they say they wish they had saved more after retirement.

More often, they regret waiting.

Waiting to travel. Waiting to spend. Waiting to make tax planning decisions. Waiting to enjoy the freedom they spent decades working toward.

While every retirement is different, a few common regrets come up time and time again.

1. Claiming Social Security Too Early

Many retirees claim Social Security as soon as they're eligible without fully understanding how the decision affects lifetime income.

Claiming early can make sense in certain situations, but for others, waiting may provide:

• Higher lifetime benefits.

• Greater survivor benefits for a spouse.

• More guaranteed income later in life.

This is one of the most permanent retirement decisions you'll make, so it's worth evaluating carefully.

2. Being Too Conservative With Investments

It's natural to become more cautious after retiring.

However, some retirees become so conservative that their portfolios struggle to keep pace with inflation.

The goal isn't to avoid all market risk.

It's to build an investment strategy that supports decades of retirement while still providing growth potential.

3. Waiting Too Long to Travel

Many retirees plan to travel "someday."

Unfortunately, health issues often become a limiting factor before finances do.

Example

A couple spends the first eight years of retirement delaying international travel because they're worried about market volatility.

By the time they feel financially comfortable, one spouse develops mobility challenges that make those trips much more difficult.

Key Insight

Your healthiest retirement years are often your most valuable. Don't assume they'll last forever.

4. Delaying Roth Conversions

Many retirees spend the years between retirement and Required Minimum Distributions (RMDs) in relatively low tax brackets.

Some never take advantage of that window.

Later, large RMDs increase:

• Taxable income.

• Medicare premiums.

• Taxes paid by surviving spouses.

• Tax burdens for heirs.

Proactive tax planning early in retirement can create flexibility later.

5. Not Simplifying Their Finances

Over the years, it's easy to accumulate:

• Multiple retirement accounts.

• Old 401(k)s.

• Several brokerage accounts.

• Numerous bank accounts.

• Insurance policies that no longer serve a purpose.

Many retirees wish they had simplified sooner.

Consolidating accounts doesn't just reduce paperwork. It can make managing finances easier for both spouses and eventually for family members.

6. Focusing So Much on Saving That They Forgot to Enjoy Retirement

Perhaps the most common regret has little to do with money.

Many retirees realize they spent decades preparing for retirement but struggled to actually enjoy it.

They postponed experiences because they were afraid of spending too much.

Years later, they recognized they had far more financial security than they believed.

A good retirement plan should provide confidence, not just caution.

Learn While You Have Options

One reason these regrets are so common is that many retirement decisions become harder to change over time.

The first decade of retirement often provides the greatest flexibility for:

• Tax planning.

• Travel.

• Spending decisions.

• Lifestyle changes.

• Charitable giving.

• Family experiences.

Making thoughtful decisions early can have benefits for years to come.

Common Theme: Waiting Too Long

Although every retiree's story is different, many regrets come back to the same idea.

"I wish we hadn't waited."

Whether it's traveling, spending, simplifying finances, or reducing future taxes, opportunities are often greatest when you're healthy and have the most flexibility.

Planning Helps Turn Regret Into Confidence

No retirement plan will eliminate every surprise.

But thoughtful planning can reduce the chances of looking back and wishing you had made different decisions.

At Greenbush Financial Group, we encourage clients to think beyond investment returns. Retirement is about making the most of your time, your resources, and the opportunities that matter most while you still have them.

Final Thoughts

The first 10 years of retirement are often called the "go-go years" for a reason.

They're typically the years when retirees have the most freedom, energy, and flexibility.

Looking back, many retirees don't regret spending too much.

They regret waiting too long to do the things they had always planned to do.

A well-designed retirement plan should help you protect your future while giving you the confidence to enjoy the present.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

Frequently Asked Questions

1. What's the biggest regret retirees have?
   Many retirees say they waited too long to travel, spend on meaningful experiences, or make important financial planning decisions.
2. Is claiming Social Security early always a mistake?
   No. The best claiming age depends on your health, marital status, income needs, and overall retirement plan.
3. Why are the first 10 years of retirement so important?
   For many people, these are the healthiest and most active years of retirement, making them an ideal time for travel, hobbies, and proactive financial planning.
4. Why do retirees regret delaying Roth conversions?
   Converting retirement assets during lower-income years may reduce future RMDs and lifetime taxes. Waiting can mean losing that planning opportunity.
5. How can I avoid common retirement regrets?
   Create a comprehensive retirement plan that addresses not only investments but also taxes, spending, healthcare, and your personal goals for retirement.

When Retirement Goes Better Than Planned: The Tax Problems of Having Too Much Money

For decades, retirement planning has centered around one question:

"Will I have enough?"

It's an understandable concern. No one wants to outlive their savings.

But after working with hundreds of retirees, we've noticed another problem that receives far less attention:

What happens when retirement goes better than expected?

Many retirees discover they saved diligently, invested wisely, spent less than anticipated, and watched their portfolios continue to grow throughout retirement. While that's certainly preferable to running out of money, it can create a new set of planning challenges.

Large retirement accounts, growing investment portfolios, and conservative spending habits often lead to higher taxes, increased Medicare premiums, and more complicated estate planning.

In other words, financial success can create tax inefficiencies if it isn't managed strategically.

Why More Money Doesn't Always Mean More Financial Flexibility

Accumulating wealth is only one part of retirement planning.

The other part is figuring out how to use that wealth efficiently.

Many retirees assume that if they don't need to withdraw money from their retirement accounts, they'll simply leave it invested. Unfortunately, the IRS has other plans.

Once Required Minimum Distributions (RMDs) begin, retirees lose much of their control over the timing of taxable withdrawals.

Even if they don't need the income, they're generally required to take distributions from traditional IRAs and many employer-sponsored retirement plans.

Those distributions can create a ripple effect across nearly every aspect of a retirement plan.

The Challenge of Large Required Minimum Distributions

For retirees with substantial tax-deferred savings, RMDs often become the biggest source of taxable income later in retirement.

What starts as a manageable annual withdrawal can grow significantly over time if investment returns outpace distributions.

Example

Mark retires at age 65 with:

• $2.8 million in traditional retirement accounts

• A paid-off home

• A pension

• Social Security benefits

He doesn't need to touch his IRA during his first several years of retirement.

By the time RMDs begin, his account has grown to more than $4 million.

Now he's required to withdraw well over $150,000 annually, regardless of whether he needs the money.

Those withdrawals increase:

• Federal taxable income

• State taxable income (where applicable)

• Medicare premiums

• Taxes on investment income

Ironically, delaying withdrawals because he didn't need the money ultimately resulted in larger taxable distributions.

Key Insight

Sometimes the biggest tax bill isn't caused by poor planning. It's caused by successful investing combined with years of deferred taxation.

Medicare IRMAA Can Turn Success Into Higher Healthcare Costs

Many retirees are surprised to learn that Medicare isn't priced the same for everyone.

Higher-income retirees pay Income-Related Monthly Adjustment Amount (IRMAA) surcharges on:

• Medicare Part B

• Medicare Part D

As retirement income increases, so do Medicare premiums.

Large RMDs are one of the most common reasons retirees unexpectedly cross into higher IRMAA brackets.

Unlike income taxes, these higher premiums often feel like an additional tax on retirement success.

Conservative Spending Can Create Bigger Tax Problems Later

Many retirees underspend because they're worried about the future.

They postpone vacations.

Delay home improvements.

Skip experiences they've always wanted.

Meanwhile, their retirement accounts continue growing.

While financial discipline is admirable, consistently spending far less than your plan allows can unintentionally increase future tax liabilities.

Example

Susan budgets $130,000 annually for retirement but only spends about $75,000 because she's afraid of running out of money.

As a result:

• Her IRA continues growing.

• Future RMDs become much larger.

• She pays more in taxes.

• Medicare premiums increase.

• She ultimately leaves a larger tax-deferred account to her children.

The money she spent decades saving may eventually be taxed at higher rates than if she had withdrawn it more strategically during retirement.

A Large Traditional IRA May Not Be the Gift You Think It Is

Many retirees view their IRA as a legacy for their children.

While those accounts can certainly provide meaningful inheritances, they also come with tax consequences.

Under current law, most non-spouse beneficiaries must fully distribute inherited retirement accounts within ten years.

For adult children in their peak earning years, those required withdrawals can push them into much higher tax brackets.

Example

A daughter earning $250,000 inherits a $1.5 million traditional IRA.

Over the next ten years, she must withdraw those funds according to current distribution rules.

Those withdrawals may be taxed at some of the highest marginal rates she'll ever pay.

Meanwhile, a Roth IRA inherited under similar circumstances may provide significantly greater tax flexibility.

Important Note

Leaving pre-tax retirement assets to heirs often transfers a future tax liability along with the inheritance.

Tax Diversification Matters Just as Much as Investment Diversification

Many retirees have diversified portfolios but not diversified tax treatment.

It's common to see wealth concentrated in:

• Traditional IRAs

• 401(k)s

• 403(b)s

While these accounts provide valuable tax deferral during working years, relying too heavily on them can reduce flexibility in retirement.

A diversified retirement income strategy may include assets held in:

• Tax-deferred accounts

• Roth accounts

• Taxable brokerage accounts

• Cash reserves

Having multiple sources of retirement income allows retirees to better manage taxable income from year to year.

Why Roth Conversions Become More Valuable

One of the best opportunities to manage future taxes often occurs before RMDs begin.

Many retirees experience several years between retirement and the start of mandatory distributions when taxable income is relatively low.

These years may provide an opportunity to convert portions of traditional retirement accounts into Roth IRAs.

The goal isn't simply to reduce taxes this year.

Instead, Roth conversions may help:

• Reduce future RMDs.

• Lower lifetime taxable income.

• Improve Medicare premium planning.

• Leave more tax-efficient assets to heirs.

• Increase flexibility when generating retirement income.

Every conversion should be evaluated within the context of the retiree's overall tax situation and long-term objectives.

The Emotional Side of Having "Too Much"

Many retirees struggle with a mindset they developed during decades of saving.

They spent their careers accumulating wealth.

Then retirement arrives, and they're suddenly expected to spend it.

That's easier said than done.

Some retirees continue saving out of habit, even when they have more than enough to support their lifestyle.

Others hesitate to enjoy experiences they've worked decades to afford because they're focused on preserving every dollar.

Financial security is important.

But retirement planning should also support the life those savings were meant to fund.

Common Mistakes Successful Retirees Make

Retirees with significant assets often make similar planning mistakes, including:

• Assuming tax-deferred always means tax-free.

• Waiting until RMDs begin before addressing taxes.

• Focusing only on investment returns instead of after-tax income.

• Ignoring future Medicare premium increases.

• Leaving large traditional IRAs to children without considering the tax burden.

• Becoming so focused on preserving wealth that they never enjoy it.

Planning Strategies for High-Net-Worth Retirees

Every situation is unique, but retirees with substantial assets should regularly evaluate strategies such as:

• Multi-year Roth conversion planning.

• Coordinating withdrawals across different account types.

• Harvesting capital gains strategically.

• Qualified Charitable Distributions (QCDs) after becoming eligible.

• Reviewing estate plans alongside tax projections.

• Modeling lifetime taxes instead of focusing only on annual tax returns.

The objective isn't necessarily to minimize taxes every year.

It's to reduce taxes over the course of retirement while creating greater flexibility for both retirees and their heirs.

More Wealth Should Create More Choices

One of the greatest benefits of financial success is flexibility.

Unfortunately, taxes can quietly reduce that flexibility if they aren't considered alongside investment performance.

Retirement planning doesn't end once you've accumulated enough assets.

In many ways, that's when some of the most important decisions begin.

At Greenbush Financial Group, we often remind clients that successful retirement planning isn't measured by the size of a portfolio. It's measured by how efficiently that wealth supports your lifestyle, your family, and your long-term goals.

Final Thoughts

Running out of money isn't the only retirement risk.

For many successful retirees, accumulating substantial wealth creates a different challenge: managing taxes, Medicare costs, Required Minimum Distributions, and legacy planning in a tax-efficient way.

With thoughtful planning, retirees may be able to reduce lifetime taxes, preserve greater flexibility, and leave a more efficient legacy for future generations. The goal isn't simply to build wealth. It's to make the most of it.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

Frequently Asked Questions

1. Can you have too much money in a traditional IRA?
   While it's difficult to have "too much" money, very large traditional IRAs can lead to substantial Required Minimum Distributions and higher lifetime taxes if no planning is done.
2. Why do large RMDs increase taxes?
   Required Minimum Distributions are generally taxed as ordinary income. Larger distributions can push retirees into higher tax brackets, increase Medicare premiums, and affect other tax calculations.
3. Should wealthy retirees still consider Roth conversions?
   In many cases, yes. Roth conversions may help reduce future RMDs, improve tax diversification, and create more tax-efficient inheritances. The right strategy depends on the retiree's projected tax situation.
4. Can leaving an IRA to my children create tax problems?
   Potentially. Most non-spouse beneficiaries must distribute inherited retirement accounts within ten years under current law, which can increase their taxable income during peak earning years.
5. Is underspending in retirement a problem?
   It can be. While spending conservatively provides peace of mind, consistently underspending may lead to larger retirement account balances, higher future RMDs, and missed opportunities to enjoy retirement.
6. What's the difference between investment success and tax efficiency?
   Investment success focuses on growing assets. Tax efficiency focuses on how much of those assets you actually keep after taxes over your lifetime and how efficiently they're passed to future generations.

The Widow's Tax Penalty: Why Taxes Often Increase After a Spouse Dies

When one spouse passes away, most families are focused on grieving, supporting loved ones, and adjusting to a new normal. Taxes are rarely at the top of the priority list.

Unfortunately, the tax code doesn't pause during this difficult time.

Many surviving spouses are surprised to learn that although household income often declines after a spouse dies, their tax rate can actually increase. Financial planners often refer to this as the widow's tax penalty.

The reason is simple. Many tax rules are designed around married couples. Once a surviving spouse begins filing as a single taxpayer, those favorable rules largely disappear while much of the household income remains.

Understanding how these changes work before they're needed can help couples make more informed decisions about Roth conversions, retirement withdrawals, Medicare planning, and estate strategies.

What Is the Widow's Tax Penalty?

The widow's tax penalty isn't a separate tax imposed by the IRS.

Instead, it's the combined effect of several tax rules that become less favorable after the death of a spouse.

These changes often occur simultaneously:

• Filing status changes from Married Filing Jointly to Single.

• Tax brackets become much narrower.

• Medicare IRMAA thresholds are cut roughly in half.

• Required Minimum Distributions (RMDs) may continue on large retirement accounts.

• Investment income may remain largely unchanged.

• Social Security benefits may not decrease proportionally.

The result is that many surviving spouses pay a higher percentage of their income in taxes than they did while both spouses were living.

How Filing Status Changes After a Spouse Dies

One of the biggest changes involves tax filing status.

Generally:

• In the year a spouse dies, the surviving spouse can usually still file a joint tax return.

• Beginning the following year, most surviving spouses file as Single, unless they qualify for another filing status such as Qualifying Surviving Spouse for a limited period when dependent children are involved.

This seemingly simple change has significant tax consequences.

Why Single Filers Reach Higher Tax Brackets Faster

The federal tax brackets for single filers are much smaller than those for married couples filing jointly.

That means the same amount of taxable income may be taxed at higher marginal rates simply because the filing status changed.

Example

John and Susan report $220,000 of taxable income while filing jointly.

After John passes away:

• Susan's income falls to $185,000.

• Although her income decreased by $35,000, she's now filing as a single taxpayer.

• More of her income falls into higher tax brackets.

Her total tax bill may increase even though she has less income to spend.

Key Insight

Many people assume taxes automatically decrease after losing a spouse because household income is lower. In reality, the opposite is often true.

Medicare IRMAA Can Increase Even Faster

One of the least understood parts of the widow's tax penalty involves Medicare.

Higher-income retirees pay Income-Related Monthly Adjustment Amount (IRMAA) surcharges on:

• Medicare Part B

• Medicare Part D

While married couples benefit from higher income thresholds, surviving spouses quickly move into the much lower single thresholds.

This means someone whose Medicare premiums were previously unaffected may suddenly begin paying hundreds or even thousands of dollars more each year.

Example

A married couple with modified adjusted gross income just below an IRMAA threshold pays standard Medicare premiums.

After one spouse dies:

• Income declines modestly.

• Filing status changes to single.

• The surviving spouse exceeds the single IRMAA threshold.

Despite earning less, Medicare premiums increase substantially.

Important Note

IRMAA is based on income from two years earlier. This delay can make premium increases feel unexpected if no planning has taken place.

Required Minimum Distributions May Stay Surprisingly High

Many retirees accumulate substantial balances in traditional IRAs and 401(k)s.

When one spouse dies:

• Those retirement accounts often transfer to the surviving spouse.

• The surviving spouse eventually takes RMDs based on the combined account value.

• Filing status has changed to single.

As a result, the surviving spouse may have:

• Large taxable RMDs

• Higher tax brackets

• Higher Medicare premiums

• Increased taxation of investment income

This combination can significantly reduce after-tax retirement income.

Social Security Doesn't Always Offset the Tax Increase

After a spouse dies, one Social Security benefit typically stops while the survivor generally receives the larger of the two benefits.

Although total Social Security income often decreases, the reduction usually isn't enough to offset:

• Higher tax rates

• Larger RMDs

• Higher Medicare premiums

Many surviving spouses discover that they have less income but a larger percentage going toward taxes.

Why Roth Conversions Matter Before Widowhood

One of the most valuable planning opportunities often occurs while both spouses are still alive.

During years when couples file jointly, they may have access to:

• Lower effective tax rates

• Wider tax brackets

• Higher IRMAA thresholds

These factors can make Roth conversions significantly more attractive before the surviving spouse is forced into the single tax brackets.

Example

David and Karen retire at age 64.

Between retirement and age 73, they convert portions of their traditional IRA to a Roth IRA while filing jointly.

Several years later, David passes away.

Because much of their retirement savings has already been moved into Roth accounts:

• Karen's future RMDs are smaller.

• Taxable income is lower.

• Medicare premiums may be lower.

• She has greater flexibility when withdrawing retirement income.

The Roth conversions did not eliminate taxes. Instead, they shifted taxation into years when the couple enjoyed more favorable tax rules.

Key Insight

Many Roth conversion strategies are less about today's taxes and more about protecting the surviving spouse's future tax situation.

Other Tax Issues Surviving Spouses May Face

The widow's tax penalty extends beyond ordinary income taxes.

Additional planning issues may include:

Capital Gains

Selling appreciated investments can trigger larger taxable gains if income already places the surviving spouse in higher brackets.

Net Investment Income Tax

Higher taxable income may expose more investment earnings to additional federal taxes.

Charitable Giving

Without careful planning, charitable deductions may become less effective depending on income levels and deduction strategies.

Estate Planning

Inherited retirement accounts may eventually pass to children, who often must withdraw inherited IRA balances within ten years under current law. Large traditional IRA balances can create significant tax burdens for heirs during their highest earning years.

Common Mistakes Couples Make

Many couples unintentionally increase the future widow's tax penalty by making decisions that seem reasonable today.

Some of the most common mistakes include:

• Assuming taxes will always be lower after one spouse dies.

• Delaying Roth conversions because they focus only on today's tax bill.

• Waiting until RMDs begin before considering tax planning.

• Ignoring future Medicare premium increases.

• Keeping nearly all retirement assets in pre-tax accounts.

• Failing to coordinate investment, tax, and estate planning.

Planning Strategies to Consider

Every family's situation is different, but several strategies may help reduce future tax challenges.

These may include:

• Evaluating Roth conversions during lower-income retirement years.

• Diversifying retirement savings across taxable, tax-deferred, and Roth accounts.

• Coordinating Social Security claiming decisions.

• Managing capital gains strategically.

• Reviewing projected RMDs well before age 73.

• Modeling tax outcomes for both spouses rather than only today's joint return.

The goal isn't simply to reduce taxes this year. It's to improve lifetime after-tax income for both spouses.

Why This Planning Matters

No one likes to think about losing a spouse.

However, proactive tax planning isn't about predicting when that event will occur. It's about recognizing that one spouse will almost certainly outlive the other.

For many couples, the years before widowhood represent their best opportunity to make tax-efficient decisions while they still benefit from married filing status.

At Greenbush Financial Group, we often model retirement income under both spouses' lifetimes rather than looking only at today's tax return. That broader perspective frequently uncovers planning opportunities that could help reduce taxes, manage Medicare premiums, and preserve more after-tax wealth for the surviving spouse and future generations.

Final Thoughts

The widow's tax penalty catches many families by surprise because it isn't a single tax. It's the cumulative effect of filing status changes, compressed tax brackets, Medicare surcharges, and ongoing retirement account distributions.

While these rules can't be avoided entirely, thoughtful planning can often soften their long-term impact. For many couples, strategies such as Roth conversions, coordinated withdrawal planning, and proactive tax forecasting are most effective while both spouses are still living and filing jointly.

Understanding these issues today can help provide greater financial flexibility and peace of mind for the surviving spouse tomorrow.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

Frequently Asked Questions

1. What is the widow's tax penalty?
   The widow's tax penalty refers to the higher taxes many surviving spouses pay after transitioning from married filing jointly to single filing status. It often results from narrower tax brackets, higher Medicare IRMAA premiums, and continued taxable retirement income.
2. Do taxes always increase after a spouse dies?
   Not always. However, many surviving spouses experience higher effective tax rates even if their household income decreases because the tax rules become less favorable for single filers.
3. Can Roth conversions reduce the widow's tax penalty?
   Potentially, yes. Completing Roth conversions while both spouses are alive and filing jointly may reduce future RMDs and taxable income for the surviving spouse.
4. Does Medicare become more expensive after a spouse dies?
   It can. The income thresholds for Medicare IRMAA surcharges are significantly lower for single taxpayers, which may cause a surviving spouse to pay higher Part B and Part D premiums.
5. Why are Required Minimum Distributions a concern for surviving spouses?
   A surviving spouse often inherits the combined retirement accounts but must take RMDs as a single taxpayer. Large taxable distributions can push them into higher tax brackets and increase Medicare premiums.
6. When should couples begin planning for the widow's tax penalty?
   Ideally, planning should begin shortly before or during retirement, particularly in the years between retirement and the start of Required Minimum Distributions. Those years often provide the greatest flexibility for tax planning.

The Retirement Conversations Every Couple Should Have Before It's Too Late

Most couples spend time preparing for retirement by saving, investing, and updating estate planning documents.

But many overlook something just as important:

Having meaningful conversations about what retirement should actually look like.

These aren't discussions about wills or powers of attorney. They're conversations about expectations, responsibilities, and what each spouse wants if life doesn't go according to plan.

Having them early can make future decisions much easier.

1. Who Handles the Finances?

In many households, one spouse naturally takes the lead on financial matters.

That's perfectly fine, until that person becomes ill or passes away.

Ask yourselves:

• Do both spouses know where the accounts are?

• Can each person pay the bills if necessary?

• Does each spouse know who to call for financial or tax advice?

• Are important documents easy to find?

The goal isn't for both spouses to do everything. It's to ensure neither feels overwhelmed if circumstances change.

2. What Happens If One of Us Becomes Incapacitated?

Retirement planning isn't just about death. It's also about the possibility that one spouse may be unable to make financial or healthcare decisions.

Discuss questions like:

• Who will manage the finances?

• When should family members become involved?

• Would you prefer to stay at home if possible?

• Who should make medical decisions?

These conversations are easier before they're needed.

3. How Do We Want to Spend Our Money?

It's common for spouses to have different priorities.

One may value travel, while the other prefers financial security.

Talk about:

• Travel goals

• Major purchases

• Helping children or grandchildren

• How much flexibility your retirement budget should have

A shared vision helps reduce disagreements later.

4. How Much Do We Want to Leave to Our Children?

Many retirees want to leave an inheritance.

But it's worth asking:

• Is leaving a large estate our highest priority?

• Would we rather spend more on experiences together?

• Should we help family members while we're living?

There isn't a right answer, but there should be a shared one.

5. What Are Our Long-Term Care Preferences?

Few people enjoy talking about aging.

Unfortunately, avoiding the conversation doesn't make the decisions easier.

Consider discussing:

• Would you prefer care at home if possible?

• When would assisted living make sense?

• How would care be paid for?

• Who should be involved in those decisions?

Knowing each other's wishes can remove uncertainty during an emotional time.

6. What Does Retirement Success Look Like?

Not everyone defines a successful retirement the same way.

For one spouse, it may mean traveling the world.

For another, it could mean spending more time with family or volunteering.

Talk about:

• What excites you most about retirement?

• What worries you?

• What do you want your days to look like?

• What goals do you still hope to accomplish?

These conversations help ensure you're planning for the same future.

Don't Wait for a Crisis

Many couples don't have these conversations until a health issue or unexpected loss forces them to.

By then, decisions are often made under stress and with limited time.

Talking through these topics while you're both healthy gives you the opportunity to think clearly and update your plans as your priorities evolve.

Common Mistakes Couples Make

Some of the most common oversights include:

• Assuming the other spouse knows all the financial details.

• Avoiding difficult conversations about aging.

• Never discussing spending priorities.

• Failing to communicate healthcare preferences.

• Waiting until a crisis to involve adult children.

A Financial Plan Should Reflect Both Spouses

A retirement plan is more than numbers on a page.

It should reflect your shared goals, values, and priorities.

At Greenbush Financial Group, we've found that some of the most valuable client meetings aren't about investment performance. They're the ones where couples gain clarity about the future they want to build together.

Final Thoughts

Estate planning documents are essential, but they can't replace honest conversations.

The more you understand each other's expectations today, the more confident you'll feel navigating whatever retirement brings tomorrow.

Those conversations may be some of the most valuable planning you ever do.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

Frequently Asked Questions

1. When should couples have these conversations?
   Ideally before retirement, but it's never too late. The earlier you discuss expectations, the more time you have to make thoughtful decisions together.
2. What if one spouse handles all the finances?
   That's common, but both spouses should understand the family's financial picture and know where important information is kept.
3. Should adult children be included in these discussions?
   Not always. However, if they may eventually help with financial or healthcare decisions, involving them at the appropriate time can be beneficial.
4. Are these conversations a substitute for estate planning?
   No. They complement legal documents like wills, trusts, and powers of attorney by helping couples communicate their wishes before decisions need to be made.
5. How often should couples revisit these discussions?
   Every few years or after major life events such as retirement, health changes, the birth of grandchildren, or the death of a loved one.

Should You Spend More in Retirement? The Case for Enjoying Your Money

One of the biggest surprises in retirement isn't that people spend too much.

It's that many spend too little.

After decades of saving and living within a budget, it can be difficult to switch from accumulating wealth to spending it. Even retirees with healthy portfolios often hesitate to travel, remodel their home, or enjoy experiences they've worked their entire lives to afford.

Being financially responsible is important. But if fear keeps you from enjoying retirement, it may be time to revisit your plan.

Why Many Retirees Underspend

Saving becomes a habit over a 30- or 40-year career. Retirement requires a different mindset.

Common reasons retirees spend less than they could include:

• Fear of running out of money

• Concern about future healthcare costs

• Uncertainty about market downturns

• A desire to leave as much as possible to their children

These are valid concerns, but they shouldn't automatically prevent you from enjoying your retirement years.

How Do You Know If You Can Spend More?

The answer isn't based on your account balance alone.

Instead, it comes down to whether your financial plan shows your income and assets can support your goals over the long term.

Some encouraging signs include:

• Your retirement income consistently exceeds your spending.

• Your portfolio continues to grow despite withdrawals.

• You've planned for healthcare and long-term care costs.

• Your withdrawals remain well within sustainable levels.

If that's the case, spending a little more may not jeopardize your financial security.

The Cost of Waiting

Many retirees postpone experiences until "someday."

They delay travel, put off family vacations, or avoid spending on hobbies because they're worried they'll need the money later.

The reality is that your ability to enjoy those experiences may decline with age.

Example

Jim and Linda planned to travel extensively in retirement but kept delaying trips because the market felt uncertain.

By their late 70s, health issues made many of those trips unrealistic.

Their savings had grown well beyond what they expected, but the opportunities they had planned for were no longer available.

Key Insight

Money can often be replaced through investment returns. Time cannot.

Spending More Doesn't Mean Spending Carelessly

This isn't an argument for reckless spending.

It's about spending intentionally on the things that matter most.

That could mean:

• Traveling while you're healthy.

• Helping grandchildren with education.

• Renovating your home to age in place.

• Pursuing hobbies or lifelong interests.

• Creating meaningful family experiences.

The goal isn't to spend more simply because you can. It's to use your money in ways that improve your quality of life.

Don't Let Taxes Make the Decision for You

Ironically, spending too little can sometimes create larger tax issues later.

If you rarely withdraw from traditional retirement accounts, those balances may continue growing until Required Minimum Distributions (RMDs) force larger taxable withdrawals.

In some cases, strategic withdrawals earlier in retirement can improve long-term tax efficiency while also providing money to enjoy retirement.

Balancing Lifestyle and Legacy

Many retirees want to leave an inheritance, and that's a worthwhile goal.

But it's also important to ask:

Are you sacrificing the retirement you envisioned to leave behind more than your family expects or needs?

In many families, children would rather see their parents enjoy retirement than leave the largest possible inheritance.

A thoughtful financial plan can help balance both objectives.

Common Signs You're Underspending

You may be living more conservatively than necessary if:

• You're consistently spending less than your financial plan anticipated.

• Your portfolio continues growing year after year.

• You regularly postpone meaningful purchases out of fear.

• You avoid experiences you've always wanted despite being financially able to afford them.

These patterns don't automatically mean you should spend more, but they're worth discussing with your financial advisor.

Planning Creates Confidence

The best spending decisions aren't driven by emotion. They're supported by a well-designed retirement plan.

When you understand how much you can safely spend, you're less likely to make decisions based solely on fear.

At Greenbush Financial Group, we believe retirement planning isn't just about preserving wealth. It's about helping clients use their resources to create the retirement they've spent decades working toward.

Final Thoughts

Saving for retirement requires discipline. Enjoying retirement requires confidence.

If your financial plan shows you have more than enough, it may be time to give yourself permission to spend on the people, experiences, and goals that matter most.

After all, the purpose of building wealth isn't simply to accumulate it. It's to use it to support a fulfilling retirement.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

Frequently Asked Questions

1. Is it common for retirees to underspend?
   Yes. Research consistently shows many retirees spend less than they can afford because they're concerned about outliving their savings.
2. How can I tell if I'm spending too little?
   A retirement income plan can project whether your current spending is sustainable. If your assets continue growing despite withdrawals, you may have room to spend more.
3. Should I prioritize spending or leaving an inheritance?
   It depends on your goals. Most retirees can strike a balance between enjoying retirement and leaving a meaningful legacy with proper planning.
4. Can spending too little create tax problems?
   Potentially. Delaying withdrawals from traditional retirement accounts can lead to larger RMDs and higher taxes later in retirement.
5. What's the biggest mistake retirees make with spending?
   Many assume they need to preserve every dollar, even when their financial plan shows they can comfortably afford to enjoy more of their retirement.

The Closer You Get to Retirement, the More Expensive Mistakes Become

Many people successfully manage their finances for decades while saving for retirement. But as retirement approaches, decisions around taxes, Social Security, healthcare, withdrawals, and income planning become more interconnected and harder to reverse. The question is not whether someone is smart enough to manage retirement alone. The question is whether the complexity of retirement planning has reached the point where professional coordination could improve outcomes. At Greenbush Financial Group, we often find that retirees seek guidance not because they lack discipline, but because retirement introduces decisions that can affect income, taxes, and financial confidence for decades.

Retirement Planning Changes Once Paychecks Stop

Many successful professionals and disciplined investors manage their finances perfectly well during their working years.

Saving for retirement is often relatively straightforward:

• Earn income

• Contribute to retirement accounts

• Invest consistently

• Avoid major mistakes

Retirement changes the equation.

Now the questions become:

• Which accounts should income come from first?

• When should Social Security begin?

• How do Roth conversions fit into the plan?

• How much cash should be kept available?

• How do withdrawals affect taxes?

• What happens if markets decline early in retirement?

• Would a surviving spouse still be financially secure?

This is why many people who comfortably handled accumulation planning begin questioning whether retirement distribution planning requires additional coordination.

Hiring a financial advisor is not about intelligence.

It is about complexity.

Retirement Planning Is More Than Investment Management

One of the biggest misconceptions about financial advisors is that their role is simply picking investments.

For retirees and pre-retirees, the larger value often comes from coordinating multiple moving parts together.

Retirement Planning Often Involves:

• Income withdrawal sequencing

• Social Security timing

• Roth conversion analysis

• Medicare IRMAA planning

• Tax-efficient withdrawals

• Required Minimum Distribution (RMD) planning

• Survivor planning

• Estate coordination

• Long-term care considerations

• Investment allocation

• Sequence-of-returns risk management

As retirement approaches, these decisions begin affecting one another.

That complexity is often what pushes people toward seeking professional guidance.

Some People May Not Need a Financial Advisor

This is important to acknowledge honestly.

Not every retiree needs ongoing financial advisory services.

Some households may have:

• Simple financial situations

• Strong financial knowledge

• Minimal tax complexity

• Pension income covering most expenses

• Small withdrawal needs

• Comfort managing investments independently

For disciplined retirees with straightforward situations, DIY retirement planning may work perfectly well.

The question is not:
“Can someone manage their own finances?”

The better question is:
“Has retirement planning become complex enough that coordination mistakes could become expensive?”

Why Retirement Mistakes Become More Expensive Later

During working years, mistakes are often easier to recover from because future earnings continue.

Retirement changes that dynamic.

Once paychecks stop:

• Tax mistakes can compound

• Poor withdrawal timing becomes harder to reverse

• Market declines may affect withdrawals

• Social Security decisions become permanent

• Healthcare costs become more important

• Sequence risk matters more

The closer someone gets to retirement, the fewer opportunities there may be to correct major planning errors later.

7 Signs Retirement Planning May Be Becoming Too Complex to Handle Alone

1. You’re Unsure How to Create Retirement Income

Many retirees know how to save.

Far fewer know how to create sustainable retirement income.

Questions often include:

• Which account should I withdraw from first?

• How much cash should I keep?

• Should I delay Social Security?

• How do taxes affect withdrawals?

If retirement income feels improvised instead of coordinated, that may indicate planning complexity has increased.

2. You Have Large IRA Balances

Large pre-tax retirement accounts can create future tax issues many retirees underestimate.

Potential concerns include:

• Large RMDs later

• Higher Medicare premiums

• Widow’s tax trap

• Increased Social Security taxation

This is where Roth conversion planning often becomes important.

The challenge is not just reducing taxes this year.

It is coordinating taxes across decades.

3. One Spouse Handles Most Financial Decisions

This is extremely common.

Often one spouse manages:

• Investments

• Taxes

• Bills

• Account access

• Financial planning

That system may work well until a health issue or death creates a sudden transition.

Many couples seek financial guidance because they want:

• Shared understanding

• Organized planning

• Continuity for the surviving spouse

Good retirement planning should work for both spouses, not just the financially engaged one.

4. You’re Concerned About Market Volatility Near Retirement

Market declines feel different once retirement approaches.

During working years, paychecks continue.

Near retirement, people often worry:

• “What happens if the market drops right after I retire?”

• “How much risk should I still take?”

• “Should I move more to cash?”

These concerns are reasonable.

A strong retirement plan balances:

• Growth

• Income

• Cash reserves

• Withdrawal flexibility

• Emotional comfort

Not just investment returns.

5. You’re Unsure About Social Security Timing

Social Security decisions can permanently affect:

• Household income

• Survivor benefits

• Taxes

• Withdrawal needs

Many retirees underestimate how much claiming timing affects long-term outcomes.

Especially for married couples, survivor planning becomes critical.

6. Your Financial Life Has Become More Complicated

Complexity often increases because of:

• Business sales

• Inheritances

• Multiple investment accounts

• Real estate holdings

• Pension decisions

• Stock compensation

• Widow/widower concerns

• Blended families

At a certain point, coordination becomes more valuable than simply managing investments independently.

7. You’re Worried You May Be Missing Something Important

This may be the most common reason retirees seek help.

Not because they feel incapable.

But because retirement decisions become interconnected.

Many retirees quietly wonder:

• “Am I withdrawing efficiently?”

• “Could I lower taxes long term?”

• “What happens if one of us dies?”

• “Are we taking too much risk?”

• “Could one mistake hurt us later?”

Those are reasonable questions.

A Simple Retirement Situation vs. A More Complex One

Example #1: Simpler Retirement Scenario

A retiree may have:

• Pension income

• Social Security

• Small IRA balances

• Minimal taxes

• Stable spending needs

This household may require relatively little ongoing planning complexity.

Example #2: More Complex Retirement Scenario

A married couple has:

• $2 million invested

• Large IRAs

• Brokerage accounts

• Deferred compensation

• Rental property

• Delayed Social Security decisions

• Roth conversion opportunities

• Widow planning concerns

Now retirement planning involves:

• Tax coordination

• Withdrawal sequencing

• Survivor planning

• Medicare considerations

• Estate organization

At this stage, the value of coordination may increase significantly.

What Good Financial Advisors Actually Help With

A good retirement-focused advisor should help coordinate:

• Taxes

• Retirement income

• Investment allocation

• Withdrawal strategy

• Long-term planning

• Estate coordination

• Survivor preparation

The value is often not “beating the market.”

The value is reducing costly mistakes and improving long-term decision coordination.

Not All Advisors Provide the Same Value

This is important.

Retirees should understand that advisors vary significantly.

Some primarily focus on:

• Investment products

• Asset gathering

• Insurance sales

Others focus on comprehensive retirement planning.

Important Questions to Ask

Before hiring someone, retirees should understand:

• Are they acting as a fiduciary?

• How are they compensated?

• Do they provide tax-aware planning?

• Do they coordinate retirement income strategy?

• How do they communicate during market volatility?

• Do they help with survivor planning?

• Will both spouses understand the plan?

A good advisor relationship should create clarity, not confusion.

Common Mistakes Retirees Make When Hiring Advisors

1. Focusing Only on Investment Returns

Retirement planning is broader than portfolio performance alone.

2. Hiring Someone Without Understanding Fees

Transparency matters.

Retirees should clearly understand:

• Advisory fees

• Product commissions

• Insurance incentives

• Planning costs

3. Assuming All Advisors Coordinate Taxes

Many do not.

Tax planning often becomes one of the most valuable retirement planning areas.

4. Waiting Until a Crisis Happens

Some retirees delay planning until:

• A spouse dies

• Markets decline

• RMDs begin

• Taxes spike

• Health changes occur

Planning is often easier before pressure builds.

Questions to Ask Yourself Before Hiring an Advisor

Consider questions like:

• Is retirement planning becoming emotionally stressful?

• Am I confident about withdrawal strategy?

• Do I understand future tax exposure?

• Would my spouse know what to do without me?

• Am I coordinating Social Security properly?

• Do I have a plan for market downturns?

• Are estate documents and beneficiaries organized?

The answers may help clarify whether professional coordination could add value.

Final Thoughts

Many people successfully manage their finances during their working years.

But retirement planning often becomes more interconnected and more difficult to reverse once income, taxes, Social Security, healthcare, and withdrawals all begin interacting simultaneously.

At Greenbush Financial Group, we often find that retirees seek guidance not because they want to give up control, but because they want greater clarity and confidence as retirement decisions become more complex.

Hiring a financial advisor is not automatically necessary for everyone.

But for some retirees, especially those approaching major retirement decisions, thoughtful coordination may help reduce costly mistakes and improve long-term financial flexibility.

The goal is not dependency.

The goal is making informed decisions during one of the most financially important transitions of life.

Rob Mangold

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally, professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, please feel free to join in on the discussion or contact me directly.

FAQ

1. When should someone hire a financial advisor before retirement?
   Many people consider hiring an advisor within 5-10 years of retirement, especially when decisions around taxes, withdrawals, Social Security, and healthcare become more complex.
2. Do all retirees need a financial advisor?
   No. Some retirees with simple financial situations and strong financial knowledge may manage retirement successfully on their own.
3. What is the difference between investment management and retirement planning?
   Investment management focuses primarily on portfolios. Retirement planning coordinates income, taxes, withdrawals, Social Security, healthcare, estate planning, and long-term sustainability.
4. Why does retirement planning become more complicated?
   Because decisions become interconnected. Withdrawals, taxes, Social Security, Medicare premiums, and market performance can all affect one another.
5. What are signs retirement planning may be too complex to handle alone?
   Common signs include large IRA balances, uncertainty around withdrawals, tax concerns, widow planning issues, and anxiety about market volatility.
6. Should DIY investors feel pressured to hire an advisor?
   No. Many successful DIY investors continue managing their finances independently. The question is whether retirement complexity has reached a level where coordination may improve outcomes.
7. What should retirees look for in a financial advisor?
   Retirees should evaluate fiduciary responsibility, fee transparency, retirement income planning experience, tax coordination, communication style, and survivor planning expertise.
8. What is the biggest mistake retirees make before hiring an advisor?
   One of the biggest mistakes is assuming retirement planning is only about investments instead of coordinating taxes, income, healthcare, and long-term financial decisions together.