6 Habits Wealthy Retirees Adopt That Most Retirees Don't

6 Habits Wealthy Retirees Adopt That Most Retirees Don't

Retirement planning often begins with savings and withdrawal rates, but affluent retirees consider broader questions. How long must their assets last? Which assets are overlooked? Who relies on the plan, and what if circumstances change? We asked two financial executives what sets affluent retirees apart.

1. They plan for their own lifespan, not an average one

Most retirement models use standard life expectancy, but affluent retirees prioritize their own longevity as a key planning factor.

"Every portfolio today is built for an average person who does not exist," says Jay Jackson, Chairman and CEO of Abacus Global Management (NYSE: ABX). "Withdrawal rates, annuity decisions, and estate timing all depend on how long you'll live, yet most plans use a generic number. Retirees who plan well ask what their personal lifespan looks like based on their health, history, and data, then build the drawdown around that. Plan for too short a life and you risk running out. Plan for too long and you may live more restrictively than needed."

2. They review life insurance instead of letting it drift

Many purchase life insurance during their careers and never review it. Affluent retirees regularly assess whether their policies remain appropriate.

"In your working years, life insurance mostly replaces your income and keeps your family in their home," says Jeremy Hewett, President and CEO of AccuQuote. "In retirement, its role changes. It might protect a surviving spouse who would lose part of a pension or Social Security income, cover final expenses, or help pass something on. Retirees who handle this well ask what this coverage is for now. Sometimes the answer is to keep it as is, sometimes to adjust it. The mistake is never asking."

3. They know what a policy is worth before giving it up

When premiums become burdensome or coverage appears unnecessary, many lapse or surrender their policies. Affluent retirees evaluate all available options first.

"Many people believe there are only two choices: keep paying or walk away," Jackson says.

"There is a third. In the secondary life insurance market, a policy can be valued and sold through a life settlement, which sometimes is worth more than the surrender value. It is not right for everyone and carries tax and estate considerations that should be reviewed with an advisor. But retirees should find out what the policy is actually worth before letting it go."

4. They ask what really drives the risk in their portfolio

Diversification in name does not always match diversification in practice. Affluent investors focus on the true drivers of returns, not just asset labels. "Many portfolios that look diversified still rise and fall on the same factors: interest rates and market cycles," Jackson says. "Experienced investors ask what each holding actually depends on. Low correlation to markets is useful, but it does not mean an asset is safe. Every asset class carries risks that need to be understood before adding anything to a retirement plan."

5. They use licensed professionals rather than buying blind

Wealthy retirees rarely make complex financial decisions alone, particularly regarding regulated products."Buying insurance online in a few clicks is easy, but easy is not the same as right," Hewett says. "A licensed agent asks questions a quote form does not: who relies on you, what your spouse's income looks like if you are gone, and whether your current policy still meets your needs. Whole life, universal life, and term coverage each serve different purposes, and retirees benefit from someone who explains the differences in plain language before they commit."

6. They start the wealth transfer conversation early

Affluent families approach inheritance as a process to plan and discuss, rather than something that simply occurs. "We are in the middle of a generational wealth transfer of roughly $124 trillion," Jackson says. "The families who handle it best talk about it while everyone can still be part of the conversation. That means knowing what assets exist, including insurance policies, how long the plan needs to run, and who the plan is meant to protect."

7. They retire from the job, not from making a business impact

For many wealthy retirees, quitting a full-time job does not mean they stop participating in business activities.

As Yuriy Boykiv, CEO of Front Row Group, points out, "many of the successful people I know do not regard retirement as an end. Instead they give advice to founders, take seats on boards, or start a smaller business in relation to something they care about. Remaining involved keeps your judgment keen and your network alive, as well as ensuring that you continue to learn about the ways in which consumers and markets are changing."

Hewett agrees that the conversation should include the people on the receiving end. "Life insurance is often the cleanest way to make sure a spouse or children aren't left sorting out debts and final costs. Tell your family what coverage exists and where to find it. A policy no one knows about does very little good."

The common ground

These habits do not require an exceptional portfolio. They replace assumptions with specifics: planning for actual lifespan, assigning a current purpose to each policy, and understanding each asset’s underlying risks. Retirees at any wealth level can adopt these practices.

Frequently Asked Questions

What kinds of habits do wealthy retirees have?

When wealthy retirees plan their arrangements, they base their plans on their own expected lifespan rather than the average. They review their life insurance policies instead of letting them operate automatically, check a policy's value before giving it up, examine the factors causing risk in their portfolio, consult qualified professionals, and begin discussions about transferring their wealth early.

Why is it better to plan according to your own lifespan rather than the average life expectancy?

The coverage period for your capital affects withdrawal rates, annuity choices, and the timing of estate arrangements. A plan based on general life expectancy may not last if you live longer than average. It might also cause you to live more restrictively than necessary if your expected lifespan is shorter.

Do retirees still need life insurance?

It depends on the current coverage level. During working years, life insurance mainly replaces income. In retirement, it can protect a surviving spouse who might lose part of their pension or Social Security income, cover final expenses, or help pass on an inheritance. It is best to consult a licensed agent about the policy's purpose rather than simply keeping or dropping it.

NOTE: This article is for general educational purposes only and does not constitute individualized financial, insurance, tax, legal, or investment advice, or an offer or solicitation to buy or sell any security or insurance product. All investments and insurance transactions involve risk, and outcomes are not guaranteed. Consult a licensed professional about your specific situation.