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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> For most retirees, retirement<\/a> means trimming expenses and learning to live within fixed limits. For the wealthy, though, the calculation is different.<\/p>\n \u201cWhen it comes to spending, wealthy people don\u2019t deprioritize anything, really, since they can afford to pay for it,\u201d said Nick Hamilton, national manager of Alliant Retirement and Investment Services<\/a>.<\/p>\n Instead of deciding what to give up, wealthy retirees tend to focus on tax efficiency, legacy planning, and making sure their heirs aren\u2019t saddled with unnecessary costs. <\/p>\n \u201cThe focus becomes less about cash flow and more about how to pass wealth efficiently,\u201d Hamilton explained.<\/p>\n<\/p>\n Here\u2019s where the wealthy often cut costs<\/a> \u2014 and where they spend freely.<\/p>\n Where the Wealthy Cut Costs Even millionaires don\u2019t want to waste money on upkeep. Hamilton said many downsize to a home<\/a> that\u2019s easier to manage as they age.\u00a0<\/p>\n \u201cThey recognize they won\u2019t be able to handle the stairs forever, and they want to move while they\u2019re still young enough to do it,\u201d he said. <\/p>\n The move often frees up cash from selling a larger property. Wealthy retirees are more selective about second homes too, weighing the carrying costs against the freedom of renting or traveling.<\/p>\n Their Heirs\u2019 Taxes<\/p>\n The Secure Act 2.0 changed how non-spouse heirs inherit retirement accounts. Instead of stretching distributions over a lifetime, heirs must empty accounts within 10 years. <\/p>\n That can push adult children into the highest tax brackets during their peak earning years. Wealthy retirees now devote significant energy to Roth conversions<\/a> and estate strategies to ease that future burden.\u00a0<\/p>\n \u201cWe spend so much time educating clients on how their wealth will transition,\u201d Hamilton said.<\/p>\n Estate Planning<\/p>\n Hamilton noted wealthy retirees often resist formal estate planning because it forces them to confront mortality, but skipping it can be costly. Probate fees and frozen accounts can drag on for a year or more.\u00a0<\/p>\n \u201cThey don\u2019t want to spend $3,000 to $5,000 on an attorney now, but their heirs will pay far more if there\u2019s no plan,\u201d Hamilton warned.<\/p>\n<\/p>\n Where the Wealthy Splurge![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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