Success in the Retirement Transition

Transitioning to retirement can be an intimidating process. People facing imminent retirement, and those already retired, must make a series of extremely important financial decisions. And typically, there is less room for error because there’s a smaller earnings cushion to fall back upon and less time to recover from financial setbacks. At this life stage, the name of the game is to avoid making costly learning mistakes.

At retirement, initial financial decisions often involve evaluation of the pension distributions options available. Cash flow, debt management, and estate planning issues must all be closely reviewed. Very high on the agenda is effective tax planning: this means successfully navigating the maze of retirement tax rules and staying out of the IRS penalty box. Poor tax planning can result in painfully large sums of money going to unnecessary taxes.

Faced with an irrevocable decision between taking a fixed monthly income from their retirement plan, or accepting investment responsibility on their nest-egg dollars, many retirees must make the biggest investment decisions of their lives. 

They know they want good investment returns and flexibility, but don't want to lose large amounts of money in the financial markets. Alternatively, they understand that being overly cautious may subject them to inflation risks and a slow, steady loss of purchasing power.

Ask the right question
The solution lies in a balanced, individualized approach to managing investment risk. Our approach is to identify the level of investment risk that’s truly appropriate for a client's situation. We then try to maximize investment returns, while still staying in line with the client's comfort range. 
People typically ask, "How have your investment returns been over the past year or two?" It's a reasonable question, but an even better question to ask, especially for an investor who is retired or soon to retire, is "How do you manage risk?"

We’ve helped many clients make the transition into retirement, comfortably replacing earned income from paychecks with consistent portfolio income. Fine-tuning cash flow, tax strategies, and investment returns prepares an overall strategy which can allow for a worry-free retirement.