Building a nest egg for retirement is only part of the retirement equation. Beyond investing wisely and budgeting to maximize your savings, a plan will need to be put into place to maximize the longevity of your savings, produce reliable income, and reduce your yearly tax bill.
Working with a financial professional that can help provide a comprehensive income-strategy is beneficial, but below are a few considerations for making your retirement accounts work best for you:
Social Security
Determining when to opt in to your Social Security benefits is a complicated decision and will differ depending on your personal circumstances.
Delaying your Social Security to maximize benefits will be beneficial to some and unwise for others. More factors to consider can be found here.
Consider Your Tax Bill
Withdrawing from tax-deferred accounts in large quantities year over year will generally result in higher tax bills and potentially higher taxes on your Social Security benefits.
Your income plan should take into consideration both your income needs and strategies for reducing your tax bill, leaving you in the lowest tax bracket possible.
Account for RMDs
Whether they’re needed as income or not, everyone will be required to withdraw Required Minimum Distributions from their tax-deferred accounts eventually (currently, the age at which RMDs begin is 73 for those who had not yet reached 72 by the end of 2022).
A plan should be in place to account for the tax-bill on RMDs and how they will be used, whether for income or reinvested.
Withdrawals and Rebalancing
As your portfolio is managed according to your risk preferences, recurring and substantial one-time withdrawals can impact the proportions invested in certain risk levels.
It is important to consistently reassess what percentages of your portfolio is invested according to your risk tolerance and rebalance as needed.
Crafting a Plan
Diving into retirement without a thoughtful income plan is like diving into the ocean without knowing how to swim. You got yourself to the water’s edge, you took the leap, but what now?
Creating an income plan with an experienced financial professional who has walked countless retirees through these same decisions can be a massive burden off your shoulders.
To schedule a complimentary financial review with Moore’s Wealth Management, click here or call our office at 770-535-5000, where a staff-member is awaiting your call Monday through Friday, 9AM to 5PM.
Sources:
[1] https://mooreswealthmanagement.com/deciding-when-to-begin-social-security-benefits/
[2] https://www.kiplinger.com/retirement/how-to-create-a-reliable-retirement-paycheck
[3] https://www.kiplinger.com/retirement/new-rmd-rules
This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.
All information contained herein is derived from sources deemed to be reliable but cannot be guaranteed. All views/opinions expressed in this newsletter are solely those of the author and do not reflect the views/opinions held by Advisory Services Network, LLC.
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Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your individual situation.
