Your retirement nest egg

Your Retirement Nest Egg- A Carton Full of Options

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Many people refer to their retirement savings as a “nest egg”. However, in theory, it should be made up of many sources of retirement income – many eggs. Even if Social Security and a 401K were their only retirement savings sources, likely they haven’t thought about their withdraw strategy. It’s not as simple as just drawing down retirement income from one or two sources without a plan. There’s a lot to be considered, like:

  • Taxable vs. Tax-Free income
  • How much of my money is available to spend in retirement?
  • Will money need to be put aside to pay taxes?
  • Are there other income streams?
  • Would investment advice produce better returns, even in retirement?
  • Is there a withdraw strategy that will be better for me than liquidating only from one or two sources?

When considering these, having only one or two eggs doesn’t seem like enough. As Americans, we have many options to save for retirement:

  • Tax-Sheltered retirement plans like 401(k), 403(b), 457, and IRAs
  • Tax-Free retirement plans like a Roth IRAs
  • Employer or Government employer-funded pension plans
  • Company profit sharing retirement plans
  • Insurance Products: Fixed-indexed annuities, Variable annuities
  • Certificates of Deposit, bonds
  • Social Security
  • Stocks, ETFs (exchange-traded funds), and Mutual Funds

All these types of retirement savings options have different rules on taxation and when they can withdraw without penalty. Delaying Social Security, while taking withdraws from other taxable retirement income sources, can greatly impact income. For this reason, a retirement portfolio must be adjusted and monitored, and a plan developed for withdrawing from each income source, and its taxation consequences. These make financial planning throughout retirement even more critical.

Financial planning before retirement is about accumulating assets and the future. But once retired, financial planning focuses on making the retirement nest egg last, accumulation and outpacing inflation, drawdown strategies, tax consequences, and estate planning in addition to many other things.

If you have multiple or only a few retirement ‘nest eggs,’ now is an excellent time for us to discuss how taxes will impact you this year or in the future.

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.

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