My Retirement Checklist (Part 2)

Last week we discussed the foundation for your retirement - calculating in detail your income and expenses at various stages throughout retirement. This week, we will discuss how to evaluate whether your investment and tax plan are working toward your retirement goals. While working with a trusted and competent advisor can be helpful for all items of the retirement checklist, they can be especially helpful in the area of investments and taxes discussed below.

 Part 1 - Income and Expenses

Part 2 - Investments & Taxes

Part 3 - Insurance & Social Security

Investments

☐ Research and understand the historical volatility of your nest egg. For example, what would it have done during 2000-2002 or 2007-2008? 

☐ Have an investment plan for how you will deal with volatility when it comes. For example, when bonds become more than 50% of my account, I will rebalance my portfolio. 

☐Ensure that your portfolio can sustain the monthly withdrawals needed throughout retirement. While the stock and bond markets will continue to evolve, history is the best guide for analyzing this.

☐ Determine which accounts to withdrawal from first to minimize lifetime taxes.

☐ Once you know which account to withdrawal from first, determine which investments should be sold each month to fund withdrawals for spending.

☐ If retiring before you claim Social Security, determine how to create a “income bridge” from investments between retirement and when you claim Social Security.

☐ If you plan to being withdrawing from investments, create direct ACH links between your investments and your checking account.

Tax Plan

☐ Calculate your expected federal and state taxes owed.

☐ Make a plan to pay them via direct withholdings or by paying quarterly estimated taxes.

☐ Evaluate tax planning opportunities during the first few years of retirement. Due to the big income fluctuations these first few years, there are a few tax strategies to consider.  Some strategies that come up often include withdrawing from the optimal account, timed Roth conversions, and more.

Next week we will wrap up the retirement checklist by discussing the decisions you have to make around insurance coverage and Social Security.

Thank you for reading,

Alex

This blog post is not advice. Please read disclaimers.