What I’ve Learned Helping People Retire
Throughout my career, I’ve had the privilege of guiding hundreds of families through the planning and transition into retirement.
Retirement planning can be quite complex.
You have to plan for:
Generating tax-efficient income that needs to last 30+ years
Navigating rising healthcare and long-term care costs
Managing taxes across multiple types of accounts
Deciding when to claim Social Security
Investing for growth while managing downside risk
Creating a plan for your estate and legacy
Coordinating and minimizing required minimum distributions (RMDs)
Tax-efficient gifting to charities and family
That’s quite a lot, right? That might seem fairly daunting but the truth is that it doesn’t have to be.
As someone who works with people within five years of retirement and those newly retired, I’ve learned that successful retirement planning balances solid financial strategy with the need to keep things simple and stress-free.
Everyone’s Retirement Journey Is Different
Some retirees want to keep things simple.
They want to consolidate accounts, reduce the number of financial decisions they need to make, and have a straightforward retirement plan that’s easy to manage.
They know that they will have predictable retirement income that allows them to live how they want to.
Others want to explore every last opportunity to maximize their retirement dollars, reduce taxes, and leave as much as possible to their heirs, even if that means more work and therefore, complexity.
Both approaches are valid. The key is finding the right balance for each person and their situation.
A Recent Client Story: When Complexity Meets Simplicity
I recently began working with a client (let’s call him, Michael) who is pretty tax-averse. Michael did not want to pay more than he had to and expressed a great deal of interest in finding ways to reduce his retirement tax burden.
In response to this, I came up with a few strategies that could make sense to achieve this:
Roth conversions in his early retirement years to take advantage of current low tax rates
“Bunched” charitable giving through a donor-advised fund to maximize tax savings
Reversing his Social Security benefits to receive at 70 instead of 65 to maximize future payments and allow for impactful Roth conversions.
Financially, this all made a ton of sense given the specifics of his situation and his desire to pay less taxes.
It would very likely reduce his tax bill and increase the amount he could spend in retirement and ultimately, pass on to his children.
But here’s the twist: Michael felt the plan was too complex and involved too many moving pieces.
We discovered that he actually valued simplicity, and the additional steps made him stressed.
What This Taught Me About Retirement Planning
This experience reinforces something important:
The best retirement plan isn’t necessarily the one that maximizes every dollar or minimizes tax.
It’s the one that feels best for you. That takes into account what is actually most important to you. That might be keeping things simple or that might be maximizing every retirement dollar and/or saving an additional tax dollar.
More Insights From Working With Retirees
Flexibility is critical - Retirement is a long journey, and your plan should be adaptable as your wishes, health, or financial situation change. What feels right at 60 might be different by 70 or 75.
Behavior matters as much as the plan - Even the best strategy won’t work if it causes stress or leads to second-guessing. Peace of mind is a key measure of success and happiness for retirees.
Communication makes a difference - Talking openly about money with your spouse, family, and financial planner helps ensure that you are aligning what truly matters to you with your finances.
Finding The Right Balance For You
Here are some questions to help you think about what’s right for you:
Do you want a simple, straightforward plan you can easily understand and manage?
Are you willing to embrace some complexity if it means potentially saving more money or paying fewer taxes?
How involved do you want to be in managing your retirement finances?
There’s no right or wrong answer here. It’s about what makes you feel secure and confident.
Ultimately, retirement planning is a deeply personal matter. Your plan should reflect your values, priorities, and comfort with complexity, not just financial math.
If you want help finding your ideal balance between simplicity and strategy, feel free to reach out. I’m here to help you build a retirement plan that feels right for you.
Have any questions about what you’ve read? Let’s talk about them!
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