Liz Weston: 3 tasks for new retirees that will pay off later

Mar 28, 2022, 4:00 AM | Updated: 4:55 am

After a working lifetime of alarm clocks and meetings, you might be looking forward to a lot more unstructured time once you retire. But taking care of one more to-do list early on can set you up for a better retirement.

The following assumes you’ve already done some basic financial planning. Ideally, before you retire, you’ll create a budget, decide when to claim Social Security, settle on a sustainable withdrawal rate from your retirement funds and figure out how you’ll cover health care expenses. If any of those topics are still a mystery, consider talking to a fee-only financial advisor. If money’s tight, you may qualify for free or low cost consultations through the Foundation for Financial Planning, National Association of Personal Financial Advisors or the Association for Financial Counseling & Planning Education, among other organizations.

Even longtime do-it-yourselfers should consider getting expert retirement planning advice, says Catherine Azeles, a certified financial planner and investment consultant in Harrisburg, Pennsylvania. Although your days may be simpler without workplace demands, your finances often become more complex.

“There’s a lot more that goes into the distribution phase of retirement than the accumulation phase,” Azeles says.

After your plan is in place, here’s what to do after you actually retire.


Inflation and volatile markets can be problematic for anyone, but they are particularly dangerous to retirees. If you’re not earning an income, you can’t ask for a raise to compensate for rising prices. Meanwhile, bad markets early in retirement can dramatically increase the chances of running short of money.

One way to cope is to identify discretionary spending that you can cut. Trimming expenses can help you offset inflation, but it can also help you ride out bad markets, says Katherine Roy, chief retirement strategist for J.P. Morgan Asset Management.

Traditionally, retirees were encouraged to withdraw a certain percentage of their investments the first year — 4% was a popular figure — and increase the withdrawal by the amount of inflation each year. J.P. Morgan research, however, shows people are less likely to run short of money if they forgo that inflationary increase when markets return less than 5% in a year, Roy says.


Many people’s tax situations change when they transition into retirement, and they may have unique opportunities to manage their tax bills, Azeles says.

Good savers, for example, could find themselves in a higher tax bracket at age 72, when required minimum withdrawals from retirement accounts typically start. In some cases, it can make sense to do partial Roth conversions in your 60s to spread out and reduce that tax bill, Azeles says. A tax pro or financial planner can help you determine if conversions are a good idea, and if so, how much to convert each year to avoid triggering a higher tax bracket or Medicare surcharges.

Another way to reduce your tax bill if you have more money than you need is to donate to charities directly from your IRA. So-called qualified charitable distributions can start at age 70 ½.

Even if you’re not awash in cash, your taxes may be higher than you expect. Most retirement income — including Social Security, pension payouts and retirement fund withdrawals — is potentially taxable. If you don’t have taxes withheld from these payments, you may need to file and pay estimated quarterly taxes to avoid penalties.


Too often, preventable diseases cut lives short or limit what people can do in retirement. Consider investing some of your newly free hours in maintaining or improving your physical health.

A medical checkup with your doctor can help you identify any conditions that need treatment, get up to date on immunizations and determine what screenings you should schedule. You also can discuss how to start or increase an exercise plan. The Centers for Disease Control and Prevention recommends 150 minutes of moderate exercise — such as brisk walking — every week, plus at least two weekly sessions of muscle-strengthening activities for all adults. People ages 65 and older should add balance exercises (you can find them online), such as standing on one foot.

Your mental and emotional health are important, as well. The people who struggle the most in retirement are often the ones who don’t have a plan for replacing some of the rewarding aspects of work, including a sense of purpose, structure and social interaction, Roy says. Social isolation can reduce both life expectancy and happiness , so consider ways to connect with other people through social engagements, volunteer work or other activities, she recommends.

Also, cut yourself some slack. Retirement will have its challenges as well as rewards, and you may need some time to get used to this new phase of life.

“Be kind to yourself, because it’s such a big transition,” Roy says.


This column was provided to The Associated Press by the personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.” Email: Twitter: @lizweston.


NerdWallet: How to get cheap or free financial advice

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


(Facebook Photo/City of San Luis, Arizona)...
Associated Press

San Luis authorities receive complaints about 911 calls going across border

Authorities in San Luis say they are receiving more complaints about 911 calls mistakenly going across the border.
7 days ago
(Pexels Photo)...
Associated Press

Daylight saving time begins in most of US this weekend

No time change is observed in Hawaii, most of Arizona, Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Marianas.
15 days ago
Mexican army soldiers prepare a search mission for four U.S. citizens kidnapped by gunmen in Matamo...
Associated Press

How the 4 abducted Americans in Mexico were located

The anonymous tip that led Mexican authorities to a remote shack where four abducted Americans were held described armed men and blindfolds.
15 days ago
Tom Brundy points to a newly built irrigation canal on one of the fields at his farm Tuesday, Feb. ...
Associated Press

Southwest farmers reluctant to idle farmland to save water

There is a growing sense that fallowing will have to be part of the solution to the increasingly desperate drought in the West.
22 days ago
A young bison calf stands in a pond with its herd at Bull Hollow, Okla., on Sept. 27, 2022. The cal...
Associated Press

US aims to restore bison herds to Native American lands after near extinction

U.S. officials will work to restore more large bison herds to Native American lands under a Friday order from Interior Secretary Deb Haaland.
22 days ago
Children play in a dried riverbed in Flassans-sur-Issole, southern France, Wednesday, March 1, 2023...
Associated Press

Italy, France confront 2nd year of western Europe drought

ROME (AP) — Bracing for Italy’s second consecutive year of drought for the first time in decades, Premier Giorgia Meloni huddled with ministers Wednesday to start mapping out an action plan Wednesday, joining France and other nations in western Europe grappling with scant winter rain and snow. Meloni and her ministers decided to appoint an […]
24 days ago

Sponsored Articles

(Pexels Photo)...

Sports gambling can be fun for adults, but it’s a dangerous game for children

While adults may find that sports gambling is a way to enhance the experience with more than just fandom on the line, it can be a dangerous proposition if children get involved in the activity.
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Desert Institute for Spine Care photo)...

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
Liz Weston: 3 tasks for new retirees that will pay off later