Experts: Banking Habits You Should Change in Retirement

Jordan Rosenfeld   Sat, May 25, 2024

While retirement is often a time when you finally get to stop thinking so hard about many of the little details in life, there are some you want to stay on top of, like your banking habits.

Some of your pre-retirement banking habits may not be as useful, protective or financially savvy after retirement.

Experts explain some banking habits you might still be doing that you’ll want to change in retirement.

Wealthy people know the best money secrets. Learn how to copy them.

Not Saving More Than Before

Retirees should consider having more money in a bank account than they did while they were working and earning an income, according to Chris Urban, CFP, a retirement planner and founder of Discovery Wealth Planning.

“These days, high-yield savings accounts are a good place to earn a reasonable amount of interest while also having access to your cash. These accounts are a great way to insulate your household from the ups and downs of the financial markets, where your other retirement and investment accounts may be invested,” Urban said.

Learn More: 7 Bills You Never Have To Pay When You Retire

Not Keeping Cash Liquid

Consider taking your spending money from this high-yield savings account and replenishing it in a tax-efficient way from your retirement and/or investment accounts in years when they have performed well, Urban explained.

“Sure, you might have what is referred to as ‘cash drag’ by holding too much in cash; however, in my opinion, retirement is much more about optimizing your overall happiness and life than it is about optimizing for investment performance,” he said.

Holding On to High-Fee Accounts

Retirees should steer clear of accounts with high fees, including maintenance fees, overdraft fees and ATM fees, according to Taylor Kovar, CFP, founder and CEO of 11 Financial.

“These fees can eat into retirement savings over time. Instead, consider switching to fee-free or low-fee accounts to minimize expenses and maximize savings,” he said.

Do your research and shop around different banks and credit unions to find accounts with low or no fees, added Lyle D. Solomon, Esq., an attorney who specializes in personal finance issues such as debt relief, taxes and estate planning at Oak View Law Group. “Don’t hesitate to switch if you find a much better deal elsewhere,” he said.

Using Non-Bank ATMs

Retirees should also be mindful of using non-bank ATMs, which often charge hefty fees for withdrawals, Kovar said.

To Read More:

https://www.yahoo.com/finance/news/experts-banking-habits-change-retirement-120105489.html