Transitioning to Retirement

If you are coming to us at this point, you may not have had guidance like we give our clients in the Approaching Retirement phase.

This area is especially critical, there are issues when you separate from service that you will have only one chance to take advantage of. Our 21 years of combined experience in helping clients navigate through this really can help make a difference.

  • If you have company stock we will discuss the advantages and disadvantages of the net unrealized appreciation “NUA” strategy that could potentially save in taxes. You only get one chance at this strategy.
  • We assess the issue of leaving your company retirement plan as is or rolling it over to a personal IRA. If you are under 59 ½ this is especially critical to address, ask us about the special rule for those between 55 – 59 ½ and separated from service. You only get one chance at this strategy. In addition to rolling over your 401(k) to an IRA, there are other options. Here is a brief look at all your options. For additional information and what is suitable for your particular situation, please consult us.

     

    1. - Leave money in your former employer's plan, if permitted

      Pro: May like the investments offered in the plan and may not have a fee for leaving it in the plan. Not a taxable event.

    2. Roll over the assets to your new employer's plan, if one is available and it is permitted.

      Pro: Keeping it all together and larger sum of money working for you, not a taxable event

      Con: Not all employer plans accept rollovers.

    3. Rollover to an IRA

      Pro: Likely more investment options, not a taxable event, consolidating accounts and locations

      Con: usually fee involved, potential termination fees

    4. Cash out the account Con: A taxable event, loss of investing potential. Costly for young individuals under 59 ½; there is a penalty of 10% in addition to income taxes. Be sure to consider all of your available options and the applicable fees and features of each option before moving your retirement assets.
  • Pension income planning – which option may be the best for you, should I take 100% and not cover my spouse, cover my spouse 50% or 100% - there are strategies to consider here – and again You only get one chance.
  • An assessment of what you can expect for your retirement income, matching up your must have* expenses and your discretionary* expenses to guaranteed sources of income and variable sources of income.
  • Asset allocation review and management of your current IRA, Roth IRA and company retirement plan accounts with an emphasis toward drawing income from the accounts.
  • Estimation of secure retirement income sources like social security, pensions and annuities.
  • Projection of funds to supplement your secure retirement income plans for your discretionary expenses.
  • Insurance analysis
  • Assessment of other goals like saving for children’s or grandchildren’s education

* must have expenses could healthcare premiums, home payments, food, utilities etc.., whereas discretionary expenses could be vacation funds, gifting funds and entertainment.

Using our experience of over 21 years in working with retirees may be beneficial to you in accumulating, managing, preserving and finally distributing the wealth you build. Call us at 480-503-1084 to schedule your complimentary, no obligation consultation.

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