Once the paycheck stops, it can be scary to go from saving to spending. Here is a story of how Angart’s financial planning services alleviated a client's concerns.

By Robert F. Angart, RIA, MBA, CPA (non-active)

Steve Lavin saved diligently for retirement throughout his 35-year career as a supply chain manager at a sportswear company. His wife, Carol, 65, worked for 35 years as an inpatient nurse for a local hospital. Despite their accumulated resources in pension plans, 401 (k) plans, and IRAs, the couple, who live in Fernando Beach, Florida, worried about running out of money, said Carol Lavin.

 Couples, like the Lavins, who have spent decades saving for retirement, can experience what may be a good problem - switching from building their savings to spending it. New retirees are often afraid. They imagine worst-case scenarios, such as a stock market crash, sky-high inflation, or dollar devaluation. When you retire, you’re often in your peak earning years. Suddenly, you face a jarring reality – no money is coming in, except Social Security, and money is going out. The immediate concern we hear from retirees is, “What if I run out of Money?”

 Before the Lavins retired, I sat down with them to determine when to take out Social Security and to assess their overall situation, comparing their estimated budget with their savings and investments. I think it starts with doing the basics right—and for many, that’s knowing and sticking to a budget. It’s easy to lose track of where your money is going when so many expenses are set up to be paid via autopay, so it’s easy to lose that sense of what’s being spent. Examine that and see what you can tighten up, or even what additional funds you can save! First, they accounted for their expected life spans. Then I ran several scenarios that factored in inflation, conservative investment returns, and spending that included unexpected expenses such as unexpected healthcare or a new roof.  “It gave us the confidence that we can enjoy what we are doing,” Steve Lavin said.

 Spending your retirement savings can be deeply emotional. When clients feel anxious about money despite having sufficient funds, it is important to show math and align emotions with reality. Getting comfortable with spending money doesn’t happen overnight. For those approaching retirement, here is a lesson plan on how to shift from accumulating your nest egg to enjoying the money you’ve saved, making sure you have enough to last your lifetime and, if you choose, leave something for your children.

Align Spending with Retirement Timeline

The first 10 years of retirement are typically when people spend the most money because they have the freedom to travel and enjoy the activities they put off while they were working full-time and raising a family. According to a RAND study, after couples turn 65, the annual rate of household spending declines by 2.4 percent. As we age and our health starts to decline, we typically spend more time at home and less money traveling and eating out. That said, every client’s spending needs are different, and a detailed budget should be prepared and updated periodically.

 After meeting with them, the Lavins felt more confident. They decided they could take more trips to visit their grandchildren in Louisiana, travel throughout the US to see family and friends, and make annual spring training pilgrimages to ballparks in Arizona.

 Consider a Retirement Paycheck

One of the hardest challenges for retirees is losing a regular paycheck while still having to pay for housing, utilities, food, clothing, automotive expenses, and health care. On top of that, inflation is adding to the problem. People are spending more money because of inflation, so it feels like you are constantly chasing a moving target. The key is to have your money wisely invested so that your assets have grown significantly more than the price of eggs has increased over the past five years.

 According to a 2025 Gallup poll, about 61 percent of Americans aged 65 and older have money invested in the stock market. This may be in the form of individual stocks, a stock mutual fund, a self-directed 401(k) plan, or an individual retirement account. The math of compounding, diversification, risk management, and disciplined withdrawals will become more important as younger generations prepare to retire. For most people, traditional pension plans have been replaced with self-directed 401(k) plans. Therefore, more Americans will need to rely on themselves to generate their own lifetime income.

 To help clients feel more secure, I recommend automating a predictable monthly transfer from their brokerage investment accounts to their checking accounts, like receiving a paycheck. This is especially helpful for people who don’t receive a monthly pension, because it creates a reliable income stream.

 While everyone’s financial situation is different, I often tell clients to follow the 4 percent rule. In general, you can use about 4 percent of your assets each year of your retirement without worrying about running out of money or dipping too far into investment principal. For instance, if your brokerage account, Individual Retirement Account, and other assets add up to $1 million, you can withdraw up to $40,000 per year. Divide that number by 12, and you can pay yourself about $3,333 once a month.

 Allow Yourself Small Splurges

People often assume they must reduce their spending when they retire, but if you’ve saved consistently and paid off your mortgage or your rent is manageable, you can enjoy retirement without pinching pennies. If the initial spending budget shows the client can spend an extra $1,000 per month, I often suggest spending an additional $500 a month on doing something they enjoy, like a weekend trip, having dinner with friends every week, or starting a new hobby. At our next meeting, I will show that the extra spending did not hurt their financial plan and ask them if it improved their quality of life.

 Use Your Money to Achieve Your Goals

Identify concrete ways to use your money, such as family vacations, gifts to loved ones or charities, or projects to renovate your home. When the conversation is framed around personal fulfillment or the ability to create memories with family, clients tend to be more comfortable with spending. I often need to remind clients that wealth isn’t meant to be preserved forever. It is intended to fund a well-lived life.

 If retired clients are considering making a charitable contribution, I often suggest a Qualified Charitable Distribution (QCD), which allows you to transfer up to $111,000 per year directly from your IRA to a qualified charity. This transfer is excluded from your taxable income and can be used to satisfy your Required Minimum Distribution (RMD) without increasing your adjusted gross income (AGI).

 To qualify, you must adhere to the following specific rules:

Age Requirement: You must be 70 1/2 or older at the time the distribution is made.
Eligible Accounts: QCDs can be made from Traditional, Rollover, and Roth IRAs (as well as inactive SEP or SIMPLE IRAs).
Direct Transfer: The funds must be transferred directly from the IRA custodian to the charity. If your IRA offers check-writing abilities, the check must be made payable directly to the charity.
Annual Limits: The maximum QCD is $111,000 per individual per year, or $222,000 for married couples filing jointly.
Ineligible Charities: You cannot make a QCD to a donor-advised fund, a private foundation, or a supporting organization.

Because a QCD excludes the money from your taxable income, it acts similarly to a deduction but is highly beneficial even if you do not itemize your deductions. By keeping your AGI lower, you can potentially help reduce Medicare premiums and lower the taxable portion of your Social Security benefits.

To set up a QCD, you will need to prepare a specific QCD distribution form. Angart & Co. can assist you in setting up a QCD while integrating this into your broader retirement strategy.

By Robert F. Angart, RIA, MBA, CPA (non-active)

In our financial planning practice when meeting with prospective clients, we often find that the client did not assign its assets to the trusts established by their estate attorney.

A method used by most attorneys today, to avoid probate and still retain maximum flexibility in disposing of your estate is to use a funded revocable living trust. A revocable "living trust" is a trust established during your lifetime. Under a living trust agreement, you, as the grantor, select a trustee (which you or your spouse) who holds and administers your property for your benefit during your lifetime pursuant to the terms of the agreement established by you. You have full control over these assets because you retain the right to amend or revoke this trust agreement at any time. Upon your death, the property held by the trustee passes to the beneficiaries you designate in your trust agreement. Because the trustee holds legal title to the assets, these assets need not be subject to probate.

An unfunded living trust will not avoid probate. Probate can be time-consuming, expensive and is available to the public. Only assets listed in the name of the trust will avoid probate.

When estate taxes are an important consideration, the use of funded revocable living trust is frequently the only way of avoiding probate and saving taxes at the same time. A trust takes advantage of each spouse's unified credit amount rather than passing all assets to the surviving spouse and getting only one credit amount upon the surviving spouse's death. By placing assets into the trust with a value equal to the Federal Estate Tax Credit Equivalent upon death of the first spouse, the trust passes the assets to the beneficiaries without having to pay taxes on them at the second death. Having the assets excluded from the estate of the second spouse to die will then save subsequent estate taxes. The surviving spouse can have "beneficial use" of the income and principle (as needed) during his or her lifetime.

Things a Revocable Living Trust can do if funded during your (grantor's) lifetime are:

• Avoid disclosure of personal information to the public.
• Administer your affairs if you become disabled or incompetent.
• Reduce estate taxes while providing for your surviving spouse.
• Control over when income or principal distributed to the beneficiaries. You have set the ages and purposes (health, education, support) for which a trustee may distribute income or principal to a beneficiary. For example, you may provide that a child receives one-half of the principal at age 25 and the balance at age 30. When an individual uses a simple will, the child receives their portion of the estate at majority, which is age 18 in Ohio.
• Protect assets from a beneficiary's creditors. 
• Protect both your spouse and children. A living trust can provide that assets pass to your children upon death of your surviving spouse. A living trust is useful in remarriage situations.

In summary, to have the revocable living trust avoid probate, it is necessary the client names the assets to the trust prior to their death. Title to all assets should be in the name of the Trustee under the Trust Agreement dated (date of execution) between Trustee and Grantor. Although there are inconveniences in transferring assets to your trust, we strongly believe these inconveniences are minor in comparison to the advantages of funding your trust. Angart & Co. will assist you in estate planning and make sure all you have transferred assets within your trust.