4 Cash Flow Moves Wealthy Retirees Make
Written by
Chris Adam
Edited by
Amen Oyiboke
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If you’re a wealthy retiree looking to make some cash flow moves, now may be the time to consider your options. With so much economic uncertainty, taking a strategic approach can be a smart way to manage your finances.
GOBankingRates talked to some retirement and finance experts for their advice. Here are four cash flow moves they suggested for retirees.
Convert IRAs
According to Gagan Saini, a finance expert and director of acquisitions at JiT Home Buyers, one way wealthy retirees optimize tax-free sources of income is by periodically converting their Roth IRAs during lower-income years. They convert some of their traditional IRAs to Roth holdings in a low tax bracket, opening up tax-free withdrawal possibilities in subsequent years when other income may place them in higher brackets.
“Throughout my career guiding high-net-worth clients, I’ve seen retirees save hundreds of thousands of dollars in taxes through this strategy,” Saini said. “One client rolled over $50,000 annually in early retirement years, creating a vast tax-free stream of income that protected them when they required minimum distributions starting at age 73.”
Create Multiple Sources of Income
Saini noted that retirees also create numerous sources of income by investing in real estate with steady cash flows. They invest in cash-flowing investment properties in secure rental markets and hire property management companies to conduct day-to-day operations, earning passive income with no active management requirements.
Be Mindful of Liquidity
According to Brandon Thor, a financial expert and CEO of The Thor Metals Group, wealthy retirees are also careful with liquidity. While their portfolios might be diversified across real estate, stocks and metals, they always ensure accessible cash reserves to cover unexpected expenses or market downturns without being forced to sell assets at a loss.
“Overall, it comes down to planning and balance,” Thor said. “Diversify your income, be proactive with taxes, and keep enough liquid assets to stay flexible. Wealth isn’t just about what you have – it’s about how effectively you manage and sustain it.”
Manage Expenses
“Even with abundant resources, wealthy retirees practice disciplined spending. They create and stick to a retirement budget that ensures their expenses align with their income,” said Donnell Stidhum, a retirement planner with Self Directed Retirement Plans LLC.
He said they regularly review their spending to identify areas where they can optimize and cut costs, ensuring they maintain financial flexibility throughout retirement. According to Stidhum, others can do this by tracking their expenses meticulously, creating a realistic retirement budget, and periodically reviewing and adjusting their spending habits to stay on track.
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