3 Ways Not to Lose Money in Retirement

Retirement is meant to be a time of financial security, not financial fear. But with longer life expectancies, inflation, market volatility, and rising healthcare costs, protecting your nest egg is more important than ever. The goal isn’t just to retire, it’s to stay retired comfortably.

Here are three ways to avoid unintentionally losing money in retirement:

1. Manage Your Withdrawal Strategy Carefully

How and when you withdraw money from your retirement accounts can make or break your financial health in your retirement years. Taking out too much too soon, especially during down markets, can lead to a phenomenon known as sequence of returns risk, where early losses have a compounding negative effect.

Consider instead:

• A safe withdrawal rate, often around 4%, adjusted for inflation.
• A bucket strategy, separating your money into short-, mid-, and long-term investments based on when you'll need it.
• Reevaluating annually and staying flexible. Like you, retirement isn't static.

2. Be Strategic About Taxes

Taxes don’t stop in retirement. In fact, without a smart strategy, taxes can quietly erode your income year after year, especially with Required Minimum Distributions (RMDs) and Social Security taxation.

Consider instead:

• Diversifying your income sources. Utilize a combination of tax-deferred, taxable, and tax-free accounts.
• Potential Roth conversions to reduce future RMDs.*
• Working with a tax-savvy advisor to time withdrawals in low tax bracket years and minimize lifetime taxes.

3. Don’t Get Too Conservative Too Soon

Many retirees shift their money into ultra-conservative investments, thinking it’s the safest move. However, over a 20- or 30-year retirement, inflation is a real threat. Playing it too safe may cause your money to lose purchasing power over time.

Consider instead:

• Keeping a portion of your portfolio invested in growth assets like stocks, especially for sustainable income throughout your retirement.
• Balancing risk with stability by maintaining a well-diversified portfolio.
• Reassessing your investment mix regularly based on market conditions and personal goals.

Make the Most of Your Retirement Money

Retirement isn’t the end of your financial journey—it’s a new phase that requires proactive planning, smart strategies, and periodic adjustments. With a personalized approach, you can help protect your wealth, generate sustainable income, and retire comfortably.

Need a personalized plan to retire confidently? Our team is here to help. Book a complimentary consultation with one of our Financial Advisors. Email us at info@financialfreedomwmg.com or call/text 458-777-4458.

*Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Information in this material is for general information only and not intended as investment, tax, or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.