Living in Retirement

Give Your Plan a Checkup

Material provided by Raymond James for use by its advisors.

Once you’ve retired, managing your money is more important than ever. During your retirement years, your personal goals and situation — as well as the economic environment — are likely to shift. These changes require careful scrutiny, perhaps resulting in adjustments related to your goals, your portfolio or both.


We can work with you to regularly review and reassess your portfolio to give you confidence that your portfolio is appropriately balanced between growth-oriented investments and income-focused assets. Contact us today.

Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Healthcare Considerations 

Many retirees underestimate how much they’ll need to cover healthcare expenses. In fact, a Center for Retirement Research study recently estimated out-of-pocket costs for a healthy 65-year-old couple to be $260,000 to $570,000* for their entire retirement. Income from investments and Social Security can go toward paying ongoing medical costs, such as Medicare premiums, deductibles and copays, but as healthcare costs continue to rise, this could place a significant strain on your retirement. We can work together to anticipate your healthcare expenses in retirement and account for them within your overall retirement income plan.

Another risk-management option is long-term care insurance, which covers a range of nursing, social and rehabilitative services for people who need ongoing assistance due to a chronic illness or disability. While you can’t know for sure if you’ll need long-term care or for how long, a comprehensive policy can help you plan for the unexpected.

Some people choose a policy to help:

  • Protect assets
  • Add options for quality care
  • Relieve family and friends from the stress of providing care
  • Preserve their independence, dignity and financial freedom

* Source: Boston College’s Center for Retirement Research, How Much is Enough? The Distribution of Lifetime Healthcare Costs, February 2010.

Did You Know?

Studies suggest one-third of people who turned 65 in 2010 will need at least three months of nursing home care, 24% more than a year, and 9% more than five years. But Medicare does not cover long-term care, and nursing home care averaged $80,000 a year, according to the U.S. Department of Health and Human Services. A home health aide is expensive as well; hiring one could cost more than $230 a day.

Source: National Clearinghouse for Long Term Care Information, Department of Health and Human Services http://www.longtermcare.gov/LTC/Main_Site/Paying/Costs/Index.aspx

Legacy Planning View

Depending on your financial situation, you may be confident you can fund a comfortable retirement and still allocate funds to leave an inheritance for family members or to donate to a favorite charity. The first priority should be ensuring your expenses can be met before you leave a monetary legacy behind.

We can assist you with your estate and legacy planning, including helping you to optimize your assets, potentially minimize tax implications, and determine the course most appropriate to your situation. In addition, we can help you select effective vehicles to implement your plans.

Keep in mind that money isn’t everything. Passing on ideals, such as ethics, morals, faith and religious beliefs, is 10 times more important to both baby boomers and their parents than the financial aspects of inheritance, according to the 2006 Allianz American Legacies Study.

Contact us to learn how we can help you to optimize your assets, potentially minimize tax implications, and determine the course most appropriate to your situation, including the selection of effective vehicles to implement your plans.

There is no assurance that any investment strategy will be successful. Investing involves risk and investors may incur a profit or a loss. Past performance is not indicative of future results.

Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of Raymond James we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

Withdrawals and Tax Implications

In addition to Social Security benefits, you probably have at least one IRA, 401(k), pension plan or other assets you’re relying on now for income – or counting on later – to finance your retirement years. At this stage you should work with us to maximize the benefits you receive from any withdrawals you are making or plan to make.

Below are some common retirement investments and key considerations for withdrawing your money:

TAXABLE ACCOUNTS

*(i.e., brokerage, savings and checking accounts)

Withdrawing from these accounts first allows more time for tax-free and tax-deferred plans to potentially grow.

TAX-FREE/TAX-DEFERRED PLANS

*(i.e., Tax-Free – Roth IRA; Tax-Deferred – traditional IRA)

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

You are required to begin withdrawing money at age 70½, but may consider reinvesting proceeds elsewhere if you do not need the immediate income.

SOCIAL SECURITY BENEFITS

*The longer you wait to tap these funds, the larger your monthly benefit will be when you do decide to take it. You are required to begin taking benefits at age 70.

We can help develop a withdrawal strategy that takes all of these considerations into account. Contact us today.

* Investors should consult with a tax advisor to determine the tax implications of the withdrawal strategies.jazu

There is no assurance that any investment strategy will be successful. Investing involves risk and investors may incur a profit or a loss. Past performance is not indicative of future results.

Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of Raymond James we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

Tapping Social Security

Although you’re entitled to draw Social Security benefits as early as age 62, tapping into your benefits before full retirement age can permanently reduce your benefits. In general, electing to delay your benefits past full retirement age – up to age 70 – will increase the amount you are eligible to receive.

When to start taking Social Security benefits depends in large part on your income needs and your health. It’s also important to consider how the amount of your monthly benefit might affect your overall retirement plan, including implications for withdrawal rates and your tax situation, among other factors.

Contact us so we can help you choose the strategy most appropriate for you.

As of May 1, 2011, new recipients of federal benefits, including Social Security retirement benefits, are required to establish direct deposit; physical checks will no longer be issued. Starting March 1, 2013, all federal benefits distributions will require direct deposit, so if you’re already receiving benefits on this date, you will need to establish electronic transfers to your bank or financial institution.

Coping With the Unexpected

Widespread economic weakness and market fluctuations have taken a toll on many investors. If you are at all concerned your retirement plan may no longer be sufficient to meet your needs, don’t delay taking action. While there are no magic fixes, a number of effective strategies do exist for potentially minimizing losses, generating additional income and planning for growth, including:

  • Planning for long-term care needs not covered by Medicare or other insurance
  • Paring your spending and rethinking non-essential goals
  • Allocating a portion — or a greater portion — of your portfolio to undervalued, growth-oriented investments
  • Preserving income with financial products, such as annuities1
  • Hedging income against rising inflation with investment options that adjust to changes in the inflation rate, such as Treasury
  • Inflation-Protected Securities (TIPS)2
  • Returning to work on either a full-time or part-time basis

We can help you look at your retirement plan comprehensively, determine if you have any gaps, and help you identify ways to potentially minimize losses in order to stay on track in retirement. Contact us today to get started.

Note: Growth-oriented investments generally involve greater risks and may not be appropriate for every investor.

There is no assurance that any investment strategy will be successful. Investing involves risk and investors may incur a profit or a loss. Past performance is not indicative of future results.

Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of Raymond James we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

1Guarantees are based on the claims-paying ability of the issuing company.

2The principal increases with inflation and decreases with deflation, as measured by the Consumer Price Index. At maturity you are paid the adjusted principal or original principal, whichever is greater. Increases in TIPS principal value as a result of inflation adjustments are taxed as capital gains in the year they occur, even though these increases are not realized until the TIPS are sold or mature. Conversely, decreases in the principal amount due to deflation can be used to offset taxable interest income.
Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are:

  • Not Deposits
  • Not insured by FDIC or any other governmental agency
  • Not guaranteed by the financial institution
  • Subject to risk, may lose value
  • Not insured by bank insurance
  • HPB Financial Services and Hickory Point Bank are independent of Raymond James Financial Services, Inc.