Some of our clients come to us as they retire or several years after leaving the workforce.
We met Steve and Laura as they were preparing to retire in their early sixties. They had both had long, successful careers but were now looking forward to traveling and spending time with grandchildren in retirement. While they had done a good job of saving, lack of time had kept them from focusing much attention on their investments. They were unsure of how they would replace their paychecks with savings, and whether they could afford to maintain both their primary and vacation homes.
We first sat down with Steve and Laura to discuss their goals and priorities for retirement, as well as their most pressing concerns. They were active and in excellent health, but had seen parents’ later years marred by chronic illness, and were concerned for themselves and their own children’s sakes. It was clearly important to them to enjoy retirement as much as possible while they were able, and to spend time at their second home in the Adirondacks as well as visiting new places. We discussed the pros and cons of long-term care coverage to address a debilitating illness in either spouse, as well as the status of their wills and related estate planning documents. After using their anticipated expenses, Social Security benefits, existing savings, and reasonable assumptions related to taxes, inflation and investment rates of return, we sat down again to go over several projections. Using different assumptions, Steve and Laura could gauge the impact of their spending and homeownership decisions.
Benefits of Working With Clarity
The advice we provided Steve and Laura allowed them to:
- Maximize their Social Security benefits by using spousal benefits and delayed credits
- Reduce long-term tax liabilities by using ROTH conversions in the years between retirement and age 70 ½, when Required Minimum Distributions begin
- Execute a withdrawal plan to tap their various investments in a low-maintenance and tax-efficient way
- Better diversify their investments and reduce management expenses
- Gain peace of mind over how to address potential long-term care costs
- Decide on a budget that allowed them to travel more and keep their second home, with options to adapt if their circumstances change