Retirement Planning

Retirement planning is the process of connecting your retirement goals to the financial decisions you make. Common retirement decisions include deciding when to retire, when to claim your Social Security benefits, how to invest your retirement savings, and how to generate income from your retirement accounts.

You probably have a general idea of where you are headed, where you would like to be, and what obstacles stand in your way. You may be unsure of the best path to take, how to get there in the most tax-efficient way, and what steps should be prioritized. That is where we come in. We can help fill in the gaps and apply our expertise to help make the most of your financial resources.

Pensions & Social Security

One of the most important factors of your retirement plan is deciding when to claim your fixed income benefits. We help retirees build an understanding of their options and how fixed income streams play into their overall retirement income strategy.

Some of the factors we consider include:

  • Your retirement budget and how much of it will be covered by fixed income sources
  • Your health and expected longevity
  • Your spouse’s level of benefits and any survivorship considerations 
  • Your lifestyle (whether you would rather spend more in early retirement vs. having a higher benefit later on)
  • Whether your pension plan is adequately funded and any alternatives available such as lump sum rollovers or annuity payouts 

Healthcare & Insurance

Healthcare is one of the largest expenses for today’s retirees. Choosing the right health insurance plan and protecting your assets with other insurance products (home, auto, liability) is a key aspect of maintaining your retirement income streams and protecting yourself from risks. 

We do not sell insurance products, but we do advise on these insurance strategies:

 

  • Selecting a health insurance plan and analyzing your ability to qualify for any subsidies, tax credits, or other benefits
  • Analyzing your Medicare options – will you enroll in original Medicare and a supplement or a Medicare Advantage plan?
  • Liability, auto, and homeowner’s insurance. These are especially important for retirees since an uninsured loss or lawsuit can derail your retirement plan.  
  • Life insurance – Does it make sense to keep your life insurance policies into retirement? 

Tax Planning

The difference between the right tax strategy and the wrong tax strategy (or no tax strategy) can make or break your retirement plan. The tax landscape changes regularly and it is important to have a flexible strategy that helps you avoid excess taxation and keeps your nest egg where it belongs – in your hands, not the government’s pockets. 

Some of the key components to a retirement tax strategy include:

  • Performing Roth conversions when appropriate, especially when your taxable income is low
  • Paying attention to the tax impact from investments which are held outside of IRAs and other tax shelters 
  • Evaluating your options for avoiding or minimizing Required Minimum Distributions 
  • Analyzing your eligibility for healthcare-related tax credits 
  • Utilizing investments that are given preferential treatment under the tax code

Retirement Income

You have spent your lifetime accumulating savings, how do you turn around and start to use it to generate income? This is where we find many retirees fail to have a strategy. 

What you invest in, the assets you sell over time to fund your withdrawals, and which account types (non-qualified, Roth, Traditional/pre-tax) you withdraw from first can have a tremendous effect on the longevity of your assets and the tax efficiency of your withdrawals. 

We can guide you through the process of turning your savings into income and calculating how much you can withdraw each month to avoid running out of money in retirement. 

 

Frequently Asked Questions

Yes – it’s spelled out in writing in our client agreement. We are a fee-only firm and we do not receive any commissions or other hidden fees. 

Idaho does not currently tax Social Security benefits (federal taxes typically will apply). Idaho does, unfortunately, tax most pension benefits. Exceptions are rare and may include Canadian Social Security benefits and some railroad retirement benefits. We recommend consulting your tax advisor and financial planner prior to claiming any benefits as there may be tax planning opportunities available to you. Generally, we recommend reviewing your options at least six months prior to your retirement date. 

Idaho income tax statutes treat pre-tax IRA and 401(k) withdrawals similar to ordinary income which is fully taxable. Qualified Roth withdrawals meeting the age and time requirements are tax-free. We recommend speaking with your tax advisor and financial planner prior to taking any withdrawals.

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