This is the crucial time to fine tune your transition into financial independence.
Many of the decisions you make will be irrevocable lifelong choices. With proper planning, both financially and emotionally, this phase will ideally involve checking off the remaining boxes to arrive at retirement. Here are important issues to address as you implement your plan:
This is a major life transition. We help you plan out how you will spend your time when you no longer are going to work. Most people need something to look forward to in order to remain in good spirits. Human beings need human interaction. It is important for people in this phase to maintain or develop friendships outside of work with others who have similar interests.
Finalize your post-retirement healthcare plan
Is there a healthcare plan from your employer? COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage can extend your health insurance for 18 months after you retire. Medicare coverage may be best if you retire at age 65. Private coverage, the government’s healthcare exchange, or coverage through a spouse who is still working may be other options to consider. We work with our clients to choose the right healthcare coverage option assuring the premium payments are accounted for in their cash flow projections.
Social Security benefits
Maximizing Social Security benefits is an essential part of nearly everyone’s retirement plans. Our analysis can help to determine the optimal time to start benefits. Maximization strategies focus on the age to draw benefits and the sequence of who draws first when dealing with married or divorced couples. The objective is to get the most dollars from Social Security during your retirement. We help our client consider all the critical issues before making this decision.
Understand your retirement paycheck
If you have a pension, it’s time to verify the details. When are you eligible? Is there a discount for drawing before age 65? It is important to understand the implications of each option to make a wise choice. Social Security is another major decision that must be done right. We run a Social Security optimization for each client to help determine the time to begin benefits in order to maximize benefits. Withdrawals from the investment portfolio can be used to supplement these sources based on cash flow projections. Remember, you may spend as many years in retirement as you did when working. Making smart choices now can help make your income last.
We help clients to create a retirement spending plan and then ask them to live on it the year before retirement. Spending is just as important as saving when it comes to retirement. We prepare tax projections for clients to compare the last year of wages with the first year of retirement income. In retirement, taxes can be withheld from income sources like pensions and Social Security or paid quarterly through estimated tax payments. Our projections consider a client’s tax liability for several years after retirement.
Make the most of your retirement.
10 years before retirement
Develop a comprehensive plan to help ensure you will reach financial independence tax efficiently.
Learn about phase 1 →
2–9 years before retirement
Reach a solid financial position through a disciplined approach to managing changes in the years leading up to retirement.
Learn about phase 2 →
1 year before and into retirement
Transition to financial independence and fine-tune your plan to prepare for post-retirement taxes and healthcare.
You are here
Stay focused on decisions related to taxes, Social Security, and investments to help ensure your savings last.
Learn about phase 4 →
Take an active role in teaching the next generation how to handle wealth and the responsibility that comes with it.
Learn about phase 5 →