10 Things the Top 10% of Retirees Do Differently With Their Money

Financial confidence in retirement isn't just about accumulating a large nest egg.

According to the Employee Benefit Research Institute, retirees in the top 10% of the wealthy share distinctive money-management behaviors — and many have little to do with investment genius and everything to do with discipline and planning.

What makes these patterns valuable is that many are accessible across the wealth spectrum — you don't need millions to adopt the behaviors that protect millions.

Here's what the most successful retirees do differently, and how to apply it at any account balance.

1. They treated retirement savings as non-negotiable during working years

Their security was built decades before retirement. These retirees consistently maxed out 401(k) contributions, treating savings as a fixed expense rather than a choice.

The compounding is dramatic — $20,000 a year from age 30 to 65 at 7% grows to roughly $2.7 million — and they added catch-up contributions after 50.

They automated contributions, raised them with every pay increase and never cut them in downturns.

2. They front-loaded Roth conversions in early retirement

Many of these retirees spent their 60s converting traditional IRA assets to Roth, especially in the low-income years from retirement to claiming Social Security.

The strategy is counterintuitive — paying taxes now to avoid them later — but it works when you convert in low brackets instead of the higher ones that required minimum distributions (RMDs) and Social Security might trigger later.

The benefits compound: Roth IRAs have no lifetime required distributions, withdrawals don't count toward Medicare IRMAA surcharges, and assets pass to heirs tax-free.

These retirees typically hold 30% to 40% of assets in a Roth by their mid-70s, vs under 10% for others.

3. They maintain multiyear cash reserves

Market volatility doesn't stress wealthy retirees because they're not forced to sell during downturns. They typically keep two to four years of spending in cash and equivalents — high-yield savings, money market funds, short-term CDs or Treasury bills.

The modest opportunity cost is really insurance against sequence-of-returns risk: The danger that selling stocks in an early downturn permanently depleting a portfolio.

Studies show two to three years of reserves raise the odds of a portfolio lasting 30-plus years by 15 to 20 percentage points.

The top 10% overwhelmingly delay Social Security to age 70, funding the early years from other assets. Each year of delay past full retirement age raises the benefit about 8% — a guaranteed, inflation-adjusted return impossible to replicate elsewhere, and for a high earner, that can mean an extra $10,000 or more a year for life.

They bridge the gap with taxable-account withdrawals, Roth conversions and earmarked cash.

For married couples, the higher earner often delays to 70, while the other claims earlier, ensuring the surviving spouse receives the maximum benefit.

5. They work with fee-only or fee-based financial advisers

According to Russell Investments' 2024 Value of an Advisor study, advisers add roughly 3.75% in net value annually through planning, coaching, tax strategy and portfolio management.

These retirees typically work with fee-only or fee-based fiduciary advisers, compensated through transparent fees rather than product commissions — so recommendations aren't skewed toward whatever pays most.

The value isn't investment selection but coordination of tax planning, behavioral coaching, estate and healthcare decisions and sustainable withdrawals.

They view advisory fees (typically 0.5% to 1.5% of assets) as insurance against costly mistakes.

6. They separate essential from discretionary spending

Wealthy retirees separate non-negotiable expenses (housing, healthcare, food, insurance) from discretionary ones (travel, entertainment, gifts, dining out).

Essentials are typically covered by Social Security, pensions and bond income, while discretionary spending comes from portfolio withdrawals — so in a downturn they can cut it 30% to 50% for a year or two, easing pressure at the worst time to sell. This isn't deprivation but options.

7. They optimize healthcare decisions strategically

These retirees treat Medicare enrollment, Medigap vs Medicare Advantage and drug-plan selection as serious planning exercises, not administrative tasks.

They typically choose Medigap — higher premiums for lower out-of-pocket risk and broader provider access — and watch income before age 65 to avoid IRMAA surcharges.

Most important, they plan for long-term care early, often buying coverage in their 50s when premiums are lower.

8. They practice tax-bracket arbitrage religiously

Perhaps the most distinctive behavior: These retirees obsess about marginal tax rates, making year-by-year decisions to minimize lifetime taxes — filling low brackets with Roth conversions, realizing capital gains at 0% when income allows, avoiding IRMAA cliffs, bunching deductions in alternate years and making qualified charitable distributions after age 70½.

Over a 30-year retirement, that discipline can save $100,000 to $200,000.

9. They rebalance systematically without emotion

These retirees rebalance on a schedule, acting when allocations drift 5% or more from their target. This enforces buying low and selling high: Surging stocks get trimmed into bonds, and crashes become buying opportunities.

The discipline matters more than the frequency: No panic-selling after declines, no chasing rallies.

10. They update estate plans and beneficiaries regularly

Finally, these retirees review estate documents every three to five years and after major life events.

They keep beneficiary designations current — which is critical, since these override will provisions — and update powers of attorney, directives and trusts to reflect current wishes and tax law.

The distinction: Average retirees create a plan once and file it away; these retirees treat it as an ongoing process.

The common thread

These behaviors share a common trait: They require planning, discipline and often some upfront costs.

These retirees build wealth not because they're investment geniuses but because they're systematic, proactive and make decisions that compound over decades.

Most of these traits can be adopted at any wealth level — you can keep proportional cash reserves, delay Social Security, practice tax-bracket arbitrage and rebalance systematically without millions in the bank.

Financial confidence in retirement is less about the size of your nest egg than how strategically you manage it.

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