Income for retirees

One of the areas that separates our financial team from other advisors is our focus on helping to provide income to retirees. We have plenty of experience in this field. 1 Williamson County, Texas, where we live and work, currently has more than 45,000 seniors, and the retiree population has grown by almost 20% over the past two years, making Williamson one of the fastest-growing counties in the country. Here in Georgetown, Texas, our very own 2 Sun City is the fastest-growing Del Webb retirement community in the country, with more than 11,500 current residents and plans to grow to 14,000 over the next few years. With thousands of retirees so close to our business, we have come to know what most retirees want and expect regarding the savings they have worked so hard over their life to earn.

Make my income last

One of the phrases we hear most often is "I don't want to outlive my money." This is a very valid concern since advances in healthcare and technology have people living longer than ever before. The majority of retirees depend on their savings to support them through retirement. Through our analysis we determine what level of income is sustainable based on a number of factors. Some of the factors we consider are spending needs, age, health, family history, risk tolerance, assets, tax consequences and your desire to pass on your estate, just to name a few. We review these factors every year to help make sure your income is still on track and to see if we can potentially increase your income.

Help my income grow

The second most common phrase we hear is "I would like to increase my income as I get older to keep up with inflation." Historically, inflation cuts the buying power of your dollar in half every 20 years or so. If you live in retirement for 40 years, goods and services could cost more than four times as much at the end of your retirement than at the beginning. If your retirement income does not keep up with inflation, your buying power decreases over time. Our experience and knowledge allow us to look for investments that have the ability to grow or increase their distributions over time to help reduce the effects of inflation.

Advise me where to take the money from

Another question we frequently hear is "From which investment/account do I take the money I need to live on?" Investing during retirement is much more complicated than during your working years. You still have the same concerns about market volatility as before but now you need to know which investments and accounts to sell, when, and how much money to take from each one. To complicate matters more, you also need to consider tax implications when choosing which account or investment to use. There are big tax differences between investments (stocks, bonds, annuities) as well as account types (IRA, Roth IRA, trust, taxable). In addition, if you have a traditional IRA or a 401(k), the IRS mandates that you start taking money out at 70½ years old. Our job is to assist you in developing an income stream and strategy to help fit your needs and minimize the tax effect of the distribution so that you get a potential sustainable, tax-efficient income.

Don't let me slip up

Most retirees do not have the time or interest to keep up with all the new laws and regulations regarding changing tax rates, gifting laws or contribution limits. Our knowledgeable team is here to assist you so that you do not make common mistakes that can be both costly and time-consuming to fix. We provide reminders and calculations to help ensure that you get your so-called required minimum distribution out of your IRA by the legally mandated date. We also can offer strategies such as charitable giving or deductions you may consider to help lower your tax bill. Whatever you need, we are here to help.

Article Sources

  1. Press Release 2016
  2. Sun City, Texas

Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.