Broker Check

How to Navigate the Complexities of Post-Retirement Planning

| June 02, 2021

Over the last 15 years, I have worked in the financial wellness sector in corporate America, teaching workshops offered through their employer on financial management, Social Security planning, estate planning, utilizing a Roth IRA, an HSA, and more. These programs are typically offered as an add-on to one's benefits package and, in many cases, can come to the employer at no additional cost. Bringing in a team of experts and fiduciaries who can advise your people on how to get their financial world in order as early as possible is a tremendous benefit that every employer should leverage.

Understanding When to Make Financial Decisions

Post-retirement planning can be complex yet massively important to families. Although financial decision-making can be complicated sometimes, it is crucial to understand when and how to allocate your money post-retirement. The Barnum SKG Team prides itself on navigating this difficult path for many families by providing comfort and ease when discussing these complex topics. As many know, the market or one’s investment portfolio does not always trend upward in a linear fashion. However, to maximize the growth and positive outcomes of post-retirement planning, it is essential to understand the time and place to make financial decisions. For example, those who retired in 2008 and had their money in stocks had to take out distributions against declining values. In a market cycle that took a long time to rebound, these people potentially had to live multiple years off a depressed value given the climate. Many had less money to allocate when the rebound came, leaving clients on the back end of their plan. Moreover, this notably happened in 2000, 2001, 2002, 2008, and 2009.

When and Where to Take Distributions

Furthermore, one of the most important jobs a financial advisor can do for their clients is advise when and where to distribute from -- not only from a market situation but also from a tax perspective. Although dealing with taxes can seemingly cause more stress to this situation, setting up an appointment with our SKG Team can alleviate and clarify these complexities. Identify the redistribution of tax brackets, increase your Medicare premium based on increasing income, and tax on social security when it could not have been. Additionally, high net worth individuals who have large qualified retirement plans may experience different risks with a proposed tax overhaul soon to come. Needless to say, the post-retirement planning process has so many more intricacies than simply asset allocation, picking a target-date fund, or some BlueChip equities, which is why we advise having a conversation with our team to address your needs.

Do I Have Enough?

One of the most common questions we face regarding this topic is “do I have enough?” Each client has a unique portfolio and flexibility relative to their worth. Depending on what current lifestyle you live and what goals you seek to achieve in the future will gauge the outcome and decision-making needed during this process. Moreover, a simple balance sheet will not tell the whole story, and we need to understand their cash flow to gauge the honest answer of what is “enough” for our clients. As always, we encourage you to have these questions answered by conversing with our team at your convenience. By taking the time to set up a plan, you will avoid the most common mistakes about post-retirement.

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