September 16, 2017
Should You Continue To Invest After Retirement?
I am not sure I have ever written about this subject before. Satisfying Retirement is not a financial blog, but our monetary resources are an important part of how well we live, so it is not a subject I ignore. If you search the archives there are plenty of blog posts about preparing yourself for retirement, managing your money, budgeting, and all the basic steps that help keep us financially afloat.
But, what about after retirement...are we done investing new money? Do we take what we have and figure that is what has to last for the rest of our lives? I can only speak for me, but, yes, that has been my assumption. After all, I don't work anymore. I have no "extra" income do I? What would I use to invest?
Actually, the more I thought about it, the more obvious became the fact that I do have money to invest. Maybe my days of making fresh financial decisions are not over. Here are some of my thoughts:
1) In an earlier post I mentioned that my wife will begin receiving spousal benefits from Social Security early in 2019. Our first thought was to just toss that extra income in our travel and vacation fund, and that still might happen. But, we could put it into one of our investment accounts and let it grow. If we don't need it down the road, the kids' inheritance would be a bit larger.
2) While not everyone's case, I have yet to start taking money from my IRA. In less than two years that will change. I will have to start withdrawing money. The Required Minimum Distribution is the government's way to insure it begins to get some taxes from the money that has been safely tucked away and growing the last 30+ years.
Like the spousal benefits, I have been living without IRA money for the past few years, I don't see that changing anytime soon. So, that forced withdrawal can be invested. I will have to check on the tax ramifications; it would be counterproductive for that money to be taxed twice. But, it is possible.
3) The inheritance I received from my parents generates money. Because we live a modest lifestyle most of the time that inheritance generates more money than we spend each year. Our financial advisor automatically reinvests whatever there is. If I don't see the extra, I am not tempted to spend it.
4) At the end of some years there is leftover cash. Expenses were lower than we had budgeted for. This post that has forced me to consider alternatives. We have just rolled that money over into the next year allowing for more money in certain budget categories for the new year. But, we could take the unspent funds and plug it back into investment accounts.
I guess all this begs the question: why would I want to keep investing? For me, there are two answers: I am naturally conservative and I don't know what the future holds. Honestly, I don't know which, if any, of these ideas I will follow. But, just knowing that investing after retirement is not such a far-fetched idea has been helpful.