Successful financial panning for retirees is often looked at as the goal of financial planning. However, the planning process does not end there. In fact, once you retire, there are many key events that a good plan should address and unique sets of challenges that go with them. Just today, we had a client comment that, “retirement keeps getting more complicated.” It is important to continuously assess how your plan is performing and adjust when needed given that financial planning for retirees can last two to three decades or more.
Common Planning Considerations for Retirees
- Social Security – Many people begin Social Security benefits at age 62 without fully understanding the tradeoffs and implications of the significant discount that is locked in at that age. We help you think through the pros and cons of taking Social Security at 62, Full Retirement Age (FRA), or somewhere in-between so that you can make an informed decision.
- Withdrawal Strategy – As you transition from saving for retirement to drawing an income, determining a proper withdrawal strategy is important to the success of your plan. Managing the tax impact is a key contributing factor. This should be reviewed and updated on an ongoing basis as market, economic, and other conditions impact your plan.
- Inflation – It is important that we review and update your plan to account for inflation and the impact it can have on your situation.
Estate Planning – You should review and update your estate plan periodically (including your beneficiary designations) to make sure that it continues to match your wishes. We help you consider and plan for future tax law changes. We also assist with philanthropic / charitable giving, including setting up Donor Advised Funds (DAFs).
Insurance / Risk Management
- Long-Term Care – Studies have shown that around 70% of people will need some form of long-term care in the future. We review the various types of long-term care insurance policies, their pros and cons, price, and other options to consider.
- Medicare and Future Health Care Costs – Navigating Medicare decisions can be a complicated and time-consuming process. Healthcare coverage is a critical part of your overall financial plan for retirees and the cost should be factored into your ongoing living expenses. We have resources to support you in data gathering and decision making.
- Risk Management – We discuss specific types of insurance coverage, including umbrella and life.
Tax Efficiency – Determining which accounts you withdraw from and when can impact your taxes in different ways. We work in conjunction with your CPA to optimize your portfolio withdrawals. The combination of Required Minimum Distributions from retirement accounts and Social Security benefits could put you in a higher tax bracket. Consideration should also be given to Roth IRA conversions to determine if they are appropriate in your situation.
- Market Volatility – A significant market decline shortly before or early in retirement can impact your financial situation. Your portfolio and financial plan should account for market volatility in retirement. We work with clients to develop an income strategy and maintain a diversified portfolio, as well as an emergency fund, which helps during different and challenging market environments. Portfolio losses in retirement can bring more financial worry than when you are working. We are here to provide guidance, perspective and financial panning for retirees in difficult market declines.
Peace of Mind for Surviving Partners – Many times, one member of the client relationship may be more involved in financial planning and has more knowledge in this area. We work closely with clients to ensure we understand their family situation, including unique needs and goals, and can be relied upon to provide guidance to all family members, even in the event of a death.
Post retirement planning can be complicated and may be more complex than pre-retirement planning. There are many important decisions that continue throughout retirement that are key to your financial success. We want to be with you every step of the way.
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