Retirement Planning in Colorado Springs
Pre-retirement provides an opportunity to create a beautiful retirement tapestry for those who make wise decisions, the impact of which could last for 30 years or more. They need to make prudent decisions regarding company retirement plans. Should they roll their retirement account to an IRA or leave it alone? Under what circumstances will the IRS require their employer to withhold 20% in taxes? Do they know the rule of 72(t) allows penalty-free withdrawals from retirement accounts before age 59 ½ provided certain conditions are met? How will they determine the precise amount of investment needed to retire comfortably? Using discounted cash flow analysis we can provide the information necessary to transition successfully into retirement.
Already retired? Time is now working against them. They’re not building an asset base anymore, worse yet they’re depleting it. They’ll likely need to adjust their investment plan to incorporate income and preservation strategies now. Certain assets must still grow, however others must remain averse to risk providing the income to maintain their lifestyle. Determining which assets to earmark for growth and which for income is an art in itself. What withdrawal rate will preserve their assets? Most people believe they can withdraw far more than is realistic without depleting their account. We use a diversified model to help build a portfolio specific to our client’s needs and time constraints.
Retirement requires certain expertise in tax issues as well. Once tax-deferred accounts now must be taxed. Required distributions must be calculated correctly to avoid the sting of a 50% IRS penalty for incorrect distributions. How will part-time work affect Social Security or the ability to contribute to an IRA? For those with annuities, how will the exclusion ratio be calculated? This significant tax benefit exclusive to the annuity is often overlooked by accountants when preparing a tax return.
What about health concerns? It is suggested that the largest expense a retiree will face in life is not a mortgage or children’s education but the expense needed to provide for health during their golden years. How will they handle the proverbial long-term care issue? Will they ignore it or perhaps allow their children to care for them? Will their loved ones have the time and resources to do that? Are there cost-effective alternatives? How do they sort through the maze of Social Security and Medicare information related to this topic?
Legacy is also of significance to their progeny. How will they pass their assets to heirs? Should they leave their assets outright to children who might never have had experience managing large accounts? There are means to protect a spendthrift child from himself by adding restrictive beneficiary designations to certain assets. Will the use of a marital trust be of value? What tax benefits are available for philanthropy?
These are just a few of the many threads found in this retirement tapestry. As these items are woven together, one may observe what looks like a hodge-podge of threads tangled together. It is only when they realize that they are looking at the back of the tapestry and turn it around that they see the beauty of intricately placed stitching and a well planned process. The end result is a fascinating tapestry to admire for years to come.
With our help, we can reveal the front of your tapestry and believe our experience will help you work towards your objectives more effectively that you would hunting and pecking on your own.