Mellody's Money on the Move: You're Retired, Now What?

Nearly everyone dreams about all the things they're going to do when they retire. But not too many people dream about what they're going to do with their money during that time.

Luckily "Good Morning America" financial contributor Mellody Hobson has thought about just that and is here to answer some of the most common retirement finance questions.

Recently she traveled to an active living community in Phoenix to take questions from retirees there.

Check out her advice below and tune in to "Good Morning America" at 7 a.m. ET for the latest in the Mellody on the Move series.

VIDEO: Mellody Hobson visits a retirement community in Arizona and answers questions.
Mellody Hobson's Financial Advice for Retirees

What If I Need a New Car?

When it comes to getting a new car when you're retired, Hobson said the best thing to do is to pay as much in cash as you can and make the biggest down payment possible.

"Don't pay any more interest than you have to," Hobson said. "Just put a bigger down payment so that your monthly payments are less, then any interest that you're paying is less."

Also, right now interest rates are low for cars, which could make your payment even lower.

Leasing a car is a fine alternative, Hobson said, but there are issues if you drive a lot. If you do drive over your mileage limit at the end of the year, you will have to pay for the extra mileage.

What Is Reverse Mortgage and Is It Right for Me?

If you own a home and it is mostly paid for, you could be a candidate for a reverse mortgage, Hobson said.

"The way reverse mortgages work is the bank will pay you a certain amount of money, usually monthly, then, when the last spouse passes away the bank recoups the cost," Hobson said.

For those that qualify, a reverse mortgage can be a good deal, but only if done with caution, Hobson said.

"The one thing that I would say is be very, very careful when you think about getting a reverse mortgage and who you use. Some organizations charge exorbitant fees, so you really want to shop around and go with a reputable provider," she said.

I'm Going Back to Work, Do I Still Feed My 401K?

There's a trick here that works for anyone over 50 and is thinking of going into retirement, whether you have once already or not.

It's called the catch-up revision, and it allows older workers to put a little more bang in each buck they save for their 401Ks.

"Basically what occurred is that Congress realized many Baby Boomers perhaps haven't saved as much as they needed to and so they said when you put money into an individual account or into a 401K plan, you can actually put more than everyone else -- more tax deferred money -- so that you can catch up in time to resave for retirement," Hobson said.

Hobson said to invest as much of it as you can, "because as you get further and further into retirement, that money will still have lots of years to still grow."

When Should I Tap Into Social Security Benefits?

If you're in good health and do not need the money, Hobson said you should wait until age 70 so you can get the highest amount of benefits. If you tap in at 62, like half of Americans, on average you'll take a 25 percent cut in benefits, Hobson said.

Married couples, on the other hand, have more options.

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