Many retirees are careful with money, especially after the paycheck stops.
That caution is understandable. But sometimes being too careful creates a different kind of problem.
In this video, I walk through a hypothetical couple who are spending less than their retirement plan allows. The unspent money may feel like a harmless cushion, but because most of it is sitting in a traditional IRA, it also carries a future tax bill.
Over time, that money may come out later through larger withdrawals or RMDs, possibly at higher tax rates. Or it may eventually pass to adult children who have to withdraw inherited IRA money during their own working years.
In this video, I discuss:
• Why unspent IRA money is not always as harmless as it looks
• How unused tax bracket room can disappear each year
• Why adult children may inherit a larger tax problem
• When spending more in retirement may actually make sense
• How Roth conversions and gifting can fit into the discussion
The goal is not to spend recklessly or give away money you may need later.
The goal is to be intentional. If your plan says you can afford to spend more than you are spending, it is worth asking where that unspent money is ultimately headed and whether there is something better you could be doing with it today.