What's Your Retirement Withdrawal Strategy?


In retirement the loss of a regular paycheck means you may need to turn to your investments for income. As a diligent saver, you likely have accumulated assets in various types of accounts like a 401(k), Roth IRA, Rollover IRA, taxable brokerage, bank savings, HSA and an annuity, just to name a few. At retirement, you may face what can seem like an overwhelming task – determining how to withdraw tax-efficiently from your different accounts to extend the portfolio’s longevity. The impact of taxes is just as important to consider now as it was when you were saving for retirement. Unfortunately, conventional wisdom regarding which order to draw down your accounts in retirement is fundamentally flawed. When followed blindly, it could potentially deduct years from the life of your portfolio.

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The IRS Just Offered You a Raise

It doesn’t happen often, but every now and then the IRS has some good news to share. For the first time in 6 years, retirement savers have just been given a “raise” for the 2019 calendar year. Thanks to persistently low levels of inflation, maximum contribution limits for various retirement accounts haven’t budged since 2013.

That’s finally changing, providing some relief for anyone looking to sock away as much savings as they can leading up to retirement. While the increases may appear relatively small at first glance, every little bit helps as the vast majority of Americans find themselves behind when it comes to saving for retirement.

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Social Security: Now or Later?

The Social Security Administration (SSA) released on October 11, 2018 its planned changes for calendar year 2019.  Not surprisingly, to both current beneficiaries and those weighing the pros and cons of starting to collect, the item of greatest interest is the cost-of-living adjustment (COLA) planned for the year ahead. More than 67 million Americans will be affected.

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A MEGA Roth Savings Opportunity Hiding Within Your 401(k)

Looking to enhance your retirement savings beyond maxing out contributions to your employer provided retirement account? Hidden deep within your 401(k) plan rules, may be an opportunity to take advantage of one of the best strategies to come along in years. It’s been dubbed the "Mega Backdoor Roth," and with a name like that, it has to be good, right?

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The Best Retirement Account You Aren't Using

Investors are used to struggling with the Traditional vs Roth retirement question - Do I take the tax savings now or will it be more advantageous to take it later? However, imagine a savings account that provides a tax deduction at the time of contribution, tax-deferred growth inside the account AND tax-free withdrawals.

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Setting Your Child Up To Be A Millionaire

In one of our recent blog posts,Are We Rich?” Raising Financially Responsible Kids, Kate Slocum wrote about the ways parents can help teach kids about money. Ultimately, the lessons she laid out can end up being the most important financial behaviors a parent can share with their child in terms of building a healthy and successful relationship with money. However, like with anything we try to teach our kids, those lessons will take time and effort before sinking in.

And while that’s absolutely the right approach, we think parents also deserve a short cut from time to time. So let’s skip the lessons (just this once of course) and talk about giving your kids a head start towards earning their first $1 million dollars. It's the "yes a balanced diet is important kids...but it's 8pm on a school night so we're making this easy and grabbing McDonald's" kind of effort everyone in the family can appreciate.

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Why You’ll (Probably) Die with Money

Leo Tolstoy’s “How Much Land Does a Man Need?” is a tale about a peasant named Pahom who’s only grief is “too little land” and claims, “If I had plenty of land, I’d fear no one—not the devil himself!” In true folkloric tradition, the devil overhears Pahom and decides to send him down a path of desire and temptation.

Presented with the prospect of being granted ownership (for a very small fee) of as much land as he can encircle on foot in one day, Pahom is overjoyed and readily agrees. However, like much in life, there is one important caveat: If he does not return to his starting point by sundown, his money is forfeited and he gets no land at all. After a restless night, Pahom sets off at sunrise and quickly becomes enamored by all the fertile land he sees.

The tale walks the line between the admirable characteristic of ambition and the destructive nature of greed. And while Tolstoy acknowledges hard work and discipline as catalysts for human development, he warns that it's also the space where unchecked ambition can turn to excess at best, and greed at worst.

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Income Replacement: What’s Your Number?


In the next 7 days roughly 70,000 baby boomers will reach full retirement age. A similar number will cross that threshold next week…and the week after that, and the week after that, and pretty much every single week until the year 2032. For those of you doing the math at home, it works out to 3.64 million people reaching full retirement age in each of the next 14 years. What’s more, each year the life expectancy for those of us who do reach full retirement age inches out further and further. Longevity is a force multiplier that has material consequences every working American must take into account when contemplating their own income replacement number.

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Managing Transition: The Key to a Successful Start in Retirement

Life can be summed up through the transitions that we experience. Whether these transitions are rewarding, like marriage or becoming a parent, or challenging, like marriage or becoming a parent, all involve an ongoing process of emotional and financial adjustment. However, when in a state of change, we often fall victim to our own weaknesses. The stress of these major life experiences can be too much for our minds and our wallets to comprehend. We are not built to only think logically. We embrace our emotions and when overwhelmed by these emotions, can make the wrong decision.

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Rocking Retirement into Your 90’s

The times they are still a-changin’, and it seems more of us are going to be around longer than expected to witness those changes unfold. Back in the day when scoring a pair of center stage tickets to see the Rolling Stones Voodoo Lounge tour was top of mind, longevity risk was something few of us baby boomers ever gave second thought to. Midway through the second decade of the new millennium, now might be a good time to give some serious thought to just how long that period of retirement is actually going to be.

By the time the curtain closes on 2015, Mick Jagger and Keith Richards will both have turned 72 years old. For those keeping score at home, that’s past the age when the IRS says you’re old enough to be required to take IRA distributions. Yikes! Given the questionable lifestyle choices those two leading edge boomers reportedly made over the years, clearly the rest of us ought to clue into the idea that living well into our 90’s is not only possible…it’s statistically probable.

If 80 actually does turn out to be the new 50, the precious nest egg you’ve managed to accumulate will have to last longer than you thought. Perhaps a lot longer. As a consequence, a bunch of folks will need to recalibrate their thinking about financial planning and retirement. And they better start doing it now. In stark contrast to the Rolling Stone’s refrain, time is not on your side.

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