John Foligno, CMC®
John has nearly 30 years of professional work and coaching/mentoring experience, which includes over 10 years of running his own business. Through empathy, active listening, and thoughtful counsel, he lives his personal mission by inspiring people to overcome the roadblocks that prevent them from accomplishing their goals and helps them to find enlightenment, fulfillment, and financial well-being. He specializes in supporting business owners and professionals, although he enjoys working with all manner of people. John attended Syracuse University – Martin J. Whitman School of Management and earned a Bachelor’s of Science, Finance, Marketing (double major), Economics (minor).
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Retirement is a major life transition and determining if you’re financially prepared can be a source of stress and uncertainty. To set yourself up for a confident retirement, it is essential to assess your financial situation, expected expenses, and long-term goals. Additionally, understanding how your lifestyle may evolve during your retirement will help you create a sustainable financial strategy.
Income Sources in Retirement
Most retirees rely on a combination of Social Security benefits and investment savings, with some fortunate enough to also receive pension income. However, when and how you claim Social Security can significantly impact your financial outlook.
- Timing Matters: Claiming Social Security as early as age 62 can reduce your benefits by up to 30%, while delaying until age 70 can increase them by as much as 24%.
- Optimizing Benefits: Understanding the best claiming strategy for your situation is crucial, as Social Security is a lifelong income source.
Another component of retirement income is investment savings, which can be challenging to navigate due to market fluctuations. Many retirees overlook the importance of aligning their portfolio with their income needs and risk tolerance.
- Stress-Test Your Portfolio: Running financial simulations can help you prepare for unexpected market downturns, rising healthcare costs, and other uncertainties.
- Work with a Professional: A fee-only fiduciary financial planner can help create a withdrawal strategy that balances growth, risk management, and tax efficiency.
Managing Retirement Withdrawals
Your income needs and tax situation will likely shift throughout retirement, making it essential to review your financial plan annually.
- Medicare Costs & Income Thresholds: Exceeding certain income levels can trigger Income-Related Monthly Adjustment Amounts (IRMAA), increasing your Medicare Part B and D premiums.
- Roth Conversions: Converting a traditional IRA to a Roth IRA before required minimum distributions (RMDs) begin can help manage future tax burdens.
- Withdrawal Strategy: There’s no universal rule for withdrawing from your investment accounts, but a well-planned approach can help you minimize taxes while keeping your portfolio working for you.
Final Thoughts
Retirement planning isn’t just about having enough savings—it’s about making informed decisions that align with your goals and lifestyle. By proactively managing your income sources, tax implications, and investment strategy, you can enjoy a financially secure and fulfilling retirement.
This article reflects the insights and opinions of its author and is not a recommendation or endorsement of their views or services.
About the Author
To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Read our editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.
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