Financial planning for retirees: Managing money with confidence.

Many retirees have spent decades building financial security and may be in a strong financial position. But as life changes, effective ways to manage and safeguard money often evolve as well. Small adjustments can make a meaningful difference, whether that involves using new technology or staying alert to fraud. Taking time to review finances during retirement can help build on what is working and identify opportunities for improvement.

For adults in their 60s or 70s, retirement can be an ideal time to take a fresh look at personal finances. A financial planning guide for retirees can help prioritize what matters most and identify investment strategies that align with individual goals and timelines.

What is the $1,000-a-month rule for retirees?

The $1,000-a-month rule is a planning tip that encourages retirees to find an extra $1,000 in reliable monthly income to help cover expenses and reduce savings withdrawals. That income could come from delaying Social Security to increase future benefits, earning part-time income, purchasing an income annuity, downsizing to lower housing costs, or turning a hobby into a steady source of cash flow.

Rather than a one-size-fits-all solution, it serves as a simple benchmark for strengthening retirement income.

For many retirees, an extra $1,000 per month can potentially increase total monthly income by about 20% to 40%, depending on Social Security benefits, pensions, and overall financial circumstances. However, the rule does not account for inflation or rising healthcare costs on its own. To help preserve purchasing power over time, retirees may consider pairing the strategy with income sources that can grow, investments designed to outpace inflation, or insurance coverage that helps protect against significant medical expenses.

Adjust investment strategies.

Financial priorities often shift during retirement. Strategies that worked well during earlier working years may not be the best fit after retirement. Many retirees move toward lower-risk investments to help protect savings from market fluctuations. Reviewing a portfolio with a financial advisor can help retirees evaluate:

• Reducing exposure to high-risk investments
• Ensuring savings can provide a steady income stream
• Understanding how required minimum distributions opens in a new window (RMDs) from retirement accounts may affect taxes

An annual financial check-in can help retirees stay on track and identify when adjustments may be needed. This is where financial planning for retirees can be especially valuable, aligning investments with cash flow needs and tax considerations.

“Unexpected changes that inevitably occur in retirement will prompt adjustments to investment allocation, income strategies and lifestyle spending,” says Kevin Casteel, senior financial planner, Commerce Trust. “But a proactive approach to financial planning will better position retirees to handle bumps along the way and minimize their long-term impact.”

Manage healthcare costs.

Healthcare is a major expense in retirement, and costs can be unpredictable. Even with Medicare, out-of-pocket expenses such as copays, prescriptions, and long-term care can add up.

Retirees may want to consider the following:

• Enrollment in the Medicare plan that best fits current healthcare needs. Plans can change annually, making open enrollment reviews important.
• How long-term care costs could be covered. Options may include Medicaid, long-term care insurance, or a health savings account (HSA).
• Whether prescription savings programs are available through pharmacies or other organizations.

Signing up for Medicare news and updates can provide helpful information about opportunities to save on healthcare expenses.

Watch for scams.

Financial scams targeting older adults continue to evolve. Scammers may pretend to be government employees, family members, or representatives from a bank.

Common red flags include:

• Unsolicited phone calls requesting financial account information or money
• Emails or text messages with urgent requests to verify an account or pay a bill
• Investment opportunities promising unusually high returns

When in doubt, retirees should avoid responding. Instead, they can contact the organization directly using an official phone number to verify whether the communication is legitimate. AARP email or text alerts can also help individuals stay informed about current scams.

Simplify everyday banking with digital tools.

While many retirees appreciate the personal connections and guidance available at their local branch, digital banking tools can complement that experience by making everyday money management more convenient. Mobile deposit, for example, allows users to deposit checks remotely by taking a photo with a smartphone.

Wire transfers are no longer the only way to electronically transfer money. Peer-to-peer (P2P) payment apps such as Zelle^® allow users to send and receive money conveniently, often within minutes. Beyond convenience, these apps can offer a practical alternative to carrying cash or mailing checks.

Learning new financial technology can feel intimidating, especially for first-time users. Some banks provide step-by-step guidance to help customers become comfortable with digital tools. For example, the Commerce Bank Mobile App allows customers to connect with a real person for one-on-one assistance.

Smart moves for a more confident retirement.

Many retirees find greater peace of mind by taking a few simple, proactive steps.

Common financial moves to review.

• Understand how timing of Social Security benefits may affect retirement income and family benefits.
• Balance savings to maintain both growth potential and liquidity for short-term needs.
• Plan withdrawals with taxes in mind, especially required minimum distributions (RMDs).
• Include healthcare and long-term care costs in a financial plan.
• Keep important documents, such as beneficiary designations, wills, and powers of attorney, up to date.

Opportunities to feel even more prepared.

• Save early and consistently whenever possible.
• Make informed decisions about when to begin receiving Social Security benefits.
• Work toward reducing or eliminating debt before retirement.
• Plan ahead for healthcare and long-term care expenses.

Taking small, thoughtful steps today can help retirees feel more confident and prepared for the years ahead.

Ask questions.

Asking questions about taxes, Social Security benefits, or Medicare opens in a new window can help retirees make informed decisions and potentially save money. The IRS offers free tax assistance through programs such as Tax Counseling for the Elderly opens in a new window (TCE), which is designed for individuals age 60 and older. Likewise, Social Security offices and Medicare counselors can help clarify benefits and answer questions. Staying informed is important because programs and regulations can change over time.

Take the next step toward financial peace of mind.

The financial landscape is constantly changing, especially for those who are retired. Following these strategies may help retirees feel more confident about managing their finances. For additional support, a Commerce Banker can help simplify financial management, provide guidance on protecting savings, and assist with planning for the future.