First, do no harm. Yes, as a physician, your number-one priority is always the patient. Day in, day out, patient by patient, your career has been driven by the desire to heal and make change for the better. As you enter retirement, saying goodbye to this rewarding life is no easy task. We at Fiduciary Wealth Management understand that the transition can be challenging both mentally and emotionally. And the last thing you need during this next chapter is financial uncertainty.
We are here to help you think about your different income sources in retirement and the implication of all those tax-deferred balances. Let’s discuss the following 5 questions to help you think strategically about your retirement income needs.
1. What Is Your Real Need?
This question seems so simple, yet it is often overlooked. Do you even know how much income you will need in retirement? Before you can develop a plan for your retirement income needs, you need to have a goal and settle on the destination to which your plan will lead you.
2. What Income Sources Do You Have?
Once you know your goal, you need to take stock of the tools available to get you there. What income sources do you have? This could be anything from Social Security and pensions to annuities, rental income, or taxable brokerage accounts. It is important to analyze your alternative income strategies and review the cost benefits of each choice of potential income elections.
3. What Are the Tax Implications?
Having clarified the different income sources available to you, it is important to understand the tax implications of each one. You may have some accounts that are pre-tax and others that are post-tax, and then there is Social Security, which is taxed based on how much total taxable income you have. It is critical to review the tax status of your accumulated assets in order to develop a tax-efficient income strategy.
4. How Should the Money Flow?
Your cash flow is simply the flow of money into and out of your hands. A cash flow plan, commonly called a budget, is simply a written document showing where your money is coming from and where it is going to go.
While you are working, cash flow planning is simplified in that you usually only have one or two sources of income that are fairly fixed. All of your planning goes into the outflow, not the inflow, of resources. In retirement, it gets more complicated. You now have multiple streams of income and can sometimes turn them on or off at will. You need to do a more in-depth cash flow planning analysis to determine the best route for your assets to reach income.
5. What Is Holding it All Together?
You didn’t reach this milestone of retirement without years of hard work and diligent saving. Now that it’s time to begin drawing from your hard-earned resources, it’s critical to have a plan in place to protect it in the coming years. A disciplined process can help reduce the impact of short-term market volatility on your income and preserve your wealth for the rest of your life as well as the generations to come.
Retirement is a rewarding and fulfilling season of life with endless possibilities, and our Fiduciary Wealth Management team knows you want to maximize its potential. That’s why we take a holistic approach to your retirement journey. First we focus on getting to know you and your needs, which allows us to craft strategies that align with your circumstances and can help you pursue your objectives. We would love to partner with you, answer your questions, and help you retire with confidence that your retirement funds will last as long as you do. Reach out to us today by scheduling a phone call now!
About Rocklin Senavinin, CFP®
With over 20 years of experience in the financial planning industry, Roc has dedicated his career to helping individuals live comfortably in retirement and enjoy the assets they have spent their career building. He is co-founder of Fiduciary Wealth Management, a fee-only registered investment advisory firm in Little Rock, Arkansas. As a CERTIFIED FINANCIAL PLANNER™ professional, he has advanced training in the holistic process of creating a personal financial plan that addresses a person’s comprehensive needs for the short and long term. To learn more, connect with Roc on LinkedIn or visit www.fidwm.com. If you have questions, feel free to schedule a phone call using this link.
The views expressed represent the opinions of Fiduciary Wealth Management, LLC and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person.
Additional information about Fiduciary Wealth Management, LLC is also available on the SEC’s website at https://www.adviserinfo.sec.gov/Firm/284324. Please call or email with questions.