Ensure That Your Retirement Plan Covers Your Workplace Exit

Ensure That Your Retirement Plan Covers Your Workplace Exit

Even for the affluent, retirement planning should be a critical component of financial security. As you are preparing to leave the workforce, while there is a sense of impending relief, there are many other things to consider, especially when it comes to managing your investable assets, savings accounts, and other financial aspects associated with retirement. 

This is why it’s vital to ensure that your retirement plan takes into account all of the changes you are likely to experience once you retire. 

This article explores the following retirement planning topics:

  • How to prepare your portfolio before you retire
  • Develop a specific spending strategy
  • Build a plan around taking Required Minimum Distributions (RMDs) from your retirement accounts
  • Analyze if an Annuity is right for you 

Prepare Your Portfolio Before You Retire

For a high-net-worth individual, retirement planning is a complex process that requires careful consideration of all of your assets, such as stocks, bonds, real estate, or private equity. With each type of asset class comes a different set of risks and rewards that you should consider as part of your retirement plan. 

This is what often makes retirement planning for the affluent a highly personalized process. There are a few key factors to take into account. First, you need to focus on preserving your capital once you. Assuming you have no plans to work part-time after retiring, you will want to make sure that your money will last throughout your golden years. 

Second, look for opportunities to generate passive income. Being financially independent, you may have multiple sources of income, but some may fare better under various circumstances than others. For example, real estate assets’ value tends to hold steady, even amid market volatility. Focus on finding investments that are likely to generate income even as inflation rages.

Finally, keep an eye out for tax-efficient investments. Taxes can take a big bite out of your retirement savings, so seek to mitigate them and save money where you can. Your financial planner should be able to assist you with appropriate tax planning and tax-efficient investment strategies. 

Specify a Retirement Spending Strategy

Especially during inflationary periods, it becomes even more important to have a solid strategy for budgeting your money once you retire. One of the biggest challenges, even for the affluent, is maintaining your purchasing power in the face of rising prices. As a result, a spending strategy that keeps pace with inflation is vital for a comfortable retirement.

Developing one can be both an art and a science. The art part is understanding how much you can actually spend in retirement without depleting your principal. Meanwhile, the science aspect involves keeping disciplined enough to stick with your spending plan.

For most people, determining their spending limits is the harder part. You need to have a good sense of how long you will live in retirement, what kind of lifestyle you want to maintain, and what unexpected costs (such as health care) might pop up. Once you have a handle on those factors, you can start to play around with different retirement income scenarios using tools like a retirement income calculator.

Once you have a sense of how much you can spend during your retirement, it’s time to start thinking about creating a spending plan that will allow you to stick to your budget. This means carefully considering which expenses are essential and which ones you could cut back on in a pinch. It also means creating a system for tracking your spending (so that you can make adjustments as needed).

Before you order a retirement cake, we recommend working with a financial advisor who can help you create a custom spending plan based on your unique circumstances. However, even if you go it alone, taking the time to think through your spending strategy proactively will pay off in the long run.

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Build a Plan Around Taking Required Minimum Distributions (RMDs) from Your Retirement Account(s)

For affluent retirees (and pre-retirees), planning is about more than just saving for the future. It’s also about minimizing taxation and maximizing income. One way to do this is by taking advantage of charitable giving strategies. Charitable giving can reduce your taxable income and, in some cases, provide a tax deduction. 

Another way to potentially lower your tax bill is by planning proactively for required minimum distributions (RMDs). RMDs are Mandatory withdrawals that must be taken from certain retirement accounts beginning at age 70 1/2. In some cases, taking your RMDs early can help to minimize the impact of taxes on your retirement income. 

Additionally, you may be able to minimize the tax liability on your investment portfolio by taking advantage of capital gains strategies. For instance, by selling appreciated assets before retirement, you can pay taxes at a lower rate, freeing up more money for other investments. 

Analyze Annuities’ Benefit

Annuities are a type of insurance product that can provide a stream of income during retirement. They are often used as part of a larger retirement strategy, but they can also be purchased on their own. One of their main benefits is that they can offer guaranteed income for life. This can be especially helpful for those who are concerned about outliving their savings. 

Another benefit of annuities is that they offer tax breaks on the interest that accrues on the investment. This can help to stretch your retirement savings further. For these reasons, they can be an attractive option for those who are looking to secure their financial future.

Planning a Business Exit 

couple preparing for retirement

If you are a business owner nearing retirement, the decision of when and how to sell your business is crucial, as well: The right timing can maximize the value of the sale, while the wrong move can leave significant wealth on the table. This is where a fiduciary wealth manager can be invaluable. 

ViaWealth can provide experienced advice on how to optimize the sale of your company, taking into account factors such as the current market conditions and your personal financial goals. Even in today’s economy, you can retire comfortably. Schedule an appointment today

ViaWealth, LLC is a Registered Investment Adviser. Information in this article is for educational purposes only and is not intended to be an offer or solicitation for the sale or purchase of any specific securities or other types of investments. Investing in the securities markets involve risk of principal and unless otherwise stated, returns are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before making any financial decisions. Past performance is not indicative of future performance.

More about the author: Lance Larson

Lance is the Managing Member and Founder of ViaWealth LLC.

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