Retirement Planning
for People During Retirement

Just because you are retired does not mean there is not planning to do. These days people are finding that they spend more years in retirement than they spent in the workplace. Ongoing financial planning can help those already retired take actions to avoid mistakes during retirement years.

Common mistakes include spending too quickly, so the money does not last or the opposite, not enjoying your hard work and spending too little so you don’t fully enjoy retirement. Often, the realization that there is no earned income will trigger fear-based emotions around investing resulting in poor investment performance. Failure to consider inflation, tax implications and best ways to withdraw cash for spending can result in dire consequences.

If you are retired and want to make sure you make the best decisions so you can continue to enjoy your lifestyle, we can help. We work with many people during their retirement years to help them enjoy their best life.

We work locally with clients at our offices in Northern NJ and Sarasota, FL, but can also serve you no matter where you are based through online video meetings.

The Two Phases of Retirement Planning:

Accumulation & Decumulation

While most financial services firms are focused on the accumulation of assets and building wealth, the focus during retirement needs to be on turning wealth into income. It might involve selling a business or a primary residence. It also could include passing wealth on to children and grandchildren. It may include legacy planning and philanthropic giving. It is a time of reflection and recalibrating purpose.

We’ll Help You Answer Your Top Retirement Questions

We’ll Help You Answer Your Top Retirement Questions During Retirement

We have worked with dozens of clients to help them gain clarity while in retirement.
We can help answer many of your most important questions, including:

  • How much do I need to retire?

    We have seen many websites provide answers that are undoubtedly simplistic and misleading! (Some websites with simple calculators say you need ten times your income at age 65 to retire). Many factors affect the amount of money you need to retire safely. Those factors include your anticipated lifestyle in retirement, your family situation, provisions around health insurance, how you invest, etc. Instead of providing a simple answer, we prepare detailed projections with multiple scenarios and include stress tests to give a more definitive answer.

  • When can I retire?

    Our focus is determining the most reasonable date for you to retire considering your goals for retirement, your potential income streams in retirement, etc. There are many considerations. For example, do you prefer to quit your current career and consider part-time work for a few years to augment your retirement income? In that case, perhaps you can partially "retire" much sooner than if you never want to work again. Whatever the plan, we want to make your retirement as secure and bulletproof as possible by stress testing it, as mentioned in the first question. In our mind, having to go back to work because you did not have the resources to retire or being at risk of outliving your assets is something we never want to happen to our clients.

  • How much can I spend in retirement?

    The confidence in knowing how much you can spend in retirement is integral to enjoying retirement and leaving the worries and stress you endured while working in the rearview mirror! At Atlas, we work closely with you to help arrive at an answer that will allow you to enjoy a steady income throughout your life and at a sustainable rate that will not impact your financial security.

  • When should I take Social Security?

    Mistakes around Social Security can cost tens of thousands or even hundreds of thousands of dollars in lifetime benefits. Many factors can influence your claiming decision, including age, projected benefits, health, and return on investment. In addition to factors directly related to Social Security, it is essential to consider taxes, other sources of income, etc. In other words, we must consider this decision in light of your circumstances. We have specialized knowledge and tools to help your family make the most informed Social Security claiming decision.

  • What pitfalls exist in claiming Medicare?

    Sadly, even decisions surrounding Medicare can be complex. Deciding when to sign up for Medicare can be based partly on your current employment and coverage. The Atlas team will help determine whether a Medicare Supplement or Medicare Advantage is right for you. In addition, we can help early retirees plan for the optimal health insurance plan before Medicare coverage starts. Unfortunately, not signing up for Medicare at the right time or choosing the wrong coverage can lead to significant and irrevocable penalties and costs. Our team will help guide you through this process to help you avoid these critical mistakes.

  • How should I manage my affairs to minimize my taxes?

    We work with clients to help reduce their tax burden, including taking action to make your portfolio more tax-efficient. Deciding on the order of withdrawals from account types to considering Roth conversions, we aim to take advantage of "tax arbitrage" opportunities and look for ways to lower your lifetime tax bill. In coordination with your accountant, we will help you devise a plan to manage your taxes to reduce your liability each year.

  • How much cash should I keep on hand?

    A reasonable cash reserve helps you survive market declines and is an essential part of the so-called "three buckets" strategy - cash, bonds, and the parts of your portfolio targeted for growth. A few years ago, cash earned nothing. Receiving a productive return on your cash reserves is more critical than ever. Our planning process helps us to identify what is a good amount of cash to have with various tradeoffs, the return on that cash, how the rest of your money is invested, and also what recurring income you have.

  • Should I consider Roth conversions?

    Maybe. If appropriately planned, Roth conversions can help you take advantage of low tax rates by shielding pre-tax retirement assets from higher tax rates. That is called "tax arbitrage," When implemented effectively, it can potentially lower your lifetime tax bill. We evaluate this strategy for our clients annually using sophisticated technology and tax planning techniques.

  • What happens if we experience a severe bear market when I retire?

    Suffering a significant decline at the onset of your retirement may be devastating to your long-term goals and plans for retirement. At Atlas, we know this risk and work to lower its potential impact on your circumstance. We stress every client's objectives against this possible scenario so you can be better prepared for its effects on your plans, and we will work with you to address it.

  • How should my investments be structured or restructured to help generate income more safely?

    We have seen many people invest in dangerous investments with risks that are not readily identifiable to try to increase income from their investments. We always lean towards using the safest investments (based on empirical data) to help generate the income you need and rely on asset allocation to reduce risk, one of the only free lunches in the investing world. We have had clients bring investments that other advisors sold that were unsuitable, one-off private investments that generated high yields on paper. In some cases, we have seen those investments default, putting the individual's entire investment at risk. We will work with you to generate income from your holdings with as little risk as possible.

Retirement Income Management

Retirement Income Management<

Upon your retirement, earned income must be replaced by various sources of income such as Social Security, defined benefit plans (aka pensions), defined contribution plans (aka 401k or 403b), and personal savings. The move away from defined benefit plans, where the employer takes the risk, to 401(k) plans means that individuals need to make their own decisions about how to allocate retirement savings and strategies to generate retirement income.

Research has shown that retirees are more reliant on their personal savings than ever before. This is complicated by the fact that people today are living longer and could face significantly higher healthcare costs in retirement than members of previous generations. Retirees are finding they require retirement income management.

Retirement income management is about making sure your retirement savings are set up to provide enough income for your needs, and that you do not outlive your assets. This includes setting up and managing a portfolio with an overlaying withdrawal strategy to supplement other income sources. To create a “paycheck substitution,” it is important to consider your overall goals in retirement, your marginal tax bracket, your Medicare bracket, inflation, and your expected lifetime.

There are three primary components to developing a distribution or income strategy:

1. Establish a less volatile portfolio (an all-weather strategy), allowing cash withdrawals despite the economic environment.

All-Weather Investment Strategy

Years ago, it made sense to protect your nest age by putting your savings into a bond ladder or a low-risk strategy such as an annuity. The problem with this strategy is it will not keep ahead of inflation and taxes.

In recent years, it has become clear that a longevity strategy may be more appropriate, as the retiree’s primary risk may now be outliving his or her capital.

The longevity strategy calls for maintaining equity exposure to help keep pace with inflation, but that does not mean simply including high volatility stock. A responsible asset allocation should include alternatives to bonds and stocks to reduce volatility but provide greater opportunities for growth. We use S.M.A.R.T.™ statistical modeling techniques to do this.

2. Determine the right withdrawal amount to distribute every month as the “paycheck substitute”.

• Once a S.M.A.R.T.™ portfolio is created, a cash withdrawal strategy can be employed. Two common techniques are:

• Constant dollar amount based on the initial dollar — usually based upon current spending (increased for inflation).

• percentage amount. For example, the 4% rule based on outdated research, recently shown to be an inadequate rule of thumb.

Our personalized approach allows us to develop an optimum paycheck amount for your needs. We allow for a changing amount based upon the overall success rate of your comprehensive plan. We conduct annual reviews to ensure the integrity of your plan, protecting the downside while also providing upside opportunities when things go well.

3. Create a strategy for efficient and timely conversion of securities to cash required for distribution as the paycheck.

Again, there are several different techniques. A systematic withdrawal approach is based on having a diverse portfolio of asset classes (the all-weather strategy) that is regularly rebalanced. Using this strategy, we maintain a cash cushion replenished by dividends, interest from bonds, appreciation, and the rebalancing mechanics to prevent having to sell a security when underperforming (thus locking in the loss). During down markets incorporating a bucket or segmentation supports the withdrawal strategy while remaining invested for long-term goals.

Retirement Advisors Who Put You First

As fee-only fiduciary advisors, we’ve built our business on a service model that puts clients first and avoids all conflicts of interest. In fact we are obligated by law and oath to recommend only strategies that we believe are ideal for your unique situation.

Unfortunately, this is not the case for the majority of advisors. Financial brokers are not required to act as fiduciaries and their advice can be conflicted by financial incentives to steer you towards particular investment vehicles.

If you’d like to work with a retirement planner who you can trust to always act in your best interest, you’ve come to the right place. As your independent fiduciary our only goal is to help you live your best life and obtain the retirement you deserve.

If you’re based in Sarasota, FL or Northern NJ, we’d love to meet with you in our office and see if we’re a good fit. If you’re based elsewhere, as many of our clients are, we’re happy to meet virtually with you to discuss your unique situation.

 Want to learn more about working with us?

Want to learn more about working with us?

We can meet in person if you live near our offices in Sarasota, Florida or Oakland, NJ, or we can meet virtually no matter where you live. Contact Us to set up an appointment.

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Laura Mattia and Stephen Craffen, partners at Atlas Fiduciary Financial cover topics related to financial planning, investing and what to look for when you hire an advisor.

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