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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> Your financial goals and risk tolerance will change over time. Younger investors often take more risks, knowing that they can wait for the stock market to recover from a correction. However, retirees<\/a> tend to become more risk-averse, and that affects how they view money and where they invest it.<\/p>\n Upper-class retirees have built nice nest eggs for themselves, but being too careless can result in them outliving their money. That\u2019s a scenario every retiree wants to avoid, and that\u2019s why upper-class retirees are making these five money moves<\/a>.<\/p>\n<\/p>\n Creating Withdrawal Strategies That Minimize Taxes<\/p>\n Upper-class retirees<\/a> aren\u2019t in a rush to withdraw every penny from their retirement accounts. They do it gradually using frameworks like the 4% withdrawal rule. This rule stipulates that you withdraw 4% of your portfolio each year and hope that your investments will continue to grow by at least 4% per year.<\/p>\n Roth IRA funds are usually the last to be withdrawn since they aren\u2019t taxed. It\u2019s better to knock out the taxable accounts early so you aren\u2019t hit with a big surprise deeper in your retirement. Upper-class retirees may also move more of their assets into dividend stocks to live on the dividends instead of selling stocks and withdrawing the proceeds as a part of the 4% rule.<\/p>\n Diversifying Their Holdings<\/p>\n Big tech stocks like Nvidia and Amazon make more sense for younger investors who can weather economic downturns. However, as investors get older, they usually distance themselves from these types of stocks in favor of blue-chip dividend stocks.\u00a0<\/p>\n Most investors diversify their portfolios, but upper-class retirees often diversify to minimize risk and preserve their nest eggs. This strategy may limit an investor\u2019s upside, but it also offers more insulation than most portfolios during downturns.<\/p>\n<\/p>\n Modifying Their Budgets<\/p>\n Upper-class retirees often monitor their budgets to ensure they aren\u2019t overspending. Many of them calculate how much they can withdraw based on the 4% rule<\/a> and decide how to allocate that money between needs and wants.<\/p>\n<\/p>\n After covering the essentials, upper-class retirees usually have some extra money left over for discretionary purchases. Couples may review their budgets and decide what they want to buy this month or save up for a big vacation later in the year.<\/p>\n Downsizing Their Homes<\/p>\n When couples start families, it makes sense to buy a large house. However, that same house will feel a bit too big when all the children have moved out. You\u2019ll still have various expenses after paying off your mortgage, such as maintenance and property taxes.<\/p>\n Some couples decide to downsize after retiring to reduce their monthly costs. A large house isn\u2019t as practical for an older couple. Some upper-class couples may switch to a one-floor house so they don\u2019t have to walk up and down a set of stairs. Older people often get injured by falling down the stairs, and some retirees may want to eliminate this risk by downsizing.<\/p>\n Delaying Social Security<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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