Navigating a clear course toward your financial security.

Step 7.  Managing your Retirement Income

While in the working world, we are accustomed to getting income from our employer or from our business. With the onset of retirement, however, the paycheck ceases. Now income may come from a number of different sources, such as Social Security, a pension or annuity, and IRAs. Properly managing these retirement income sources requires planning and monitoring.

Social Security:  You probably know that the size of your Social Security payment depends on when you start collecting benefits. The longer you wait, the larger your monthly payment.  We can help you determine the optimum time to commence Social Security payments based on your specific circumstances.

Expense tracking:  If there ever was a time that you need to track your expenses, early retirement is the time.  With actual figures in hand, you can adjust your lifestyle at the outset of retirement to prevent a difficult situation later.  There are a number of software programs, such as Intuit’s Quicken and Microsoft’s Money, to help you track expenditures.

Required Minimum Distributions (RMD): At age 72, IRS rules require that certain amounts be withdrawn from your tax-deferred retirement portfolios. Required minimum distributions are based on several factors including your age, the age of your beneficiary and the amount in your portfolio. Failure to withdraw the minimum amount results in a 50% tax penalty on the amount that was not timely withdrawn.  We can calculate the required minimum distribution and then ensure that the amount is properly distributed to you.

Account withdrawal selection:  When it is time to tap your various account assets, a number of factors need to be considered, such as the size of each account, the securities within each account and the taxability of each account.  We will help you determine the order in which to draw down your accounts.

Portfolio withdrawal rate monitoring:  Using the net worth statement and the retirement budget, a portfolio withdrawal rate may be calculated.  By monitoring your portfolio withdrawal rate, you can assure yourself that you will have sufficient assets to fully fund your retirement.  At worst, you discover before retirement that you need to work longer, or that you may need to engage in part-time work during retirement.  Our goal is to help you develop and maintain a sustainable withdrawal rate strategy.

Continue with Step 8.  Monitoring your Retirement Assets

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