What’s Hatching
- School’s Out! And So Is Your Regular Routine … Which can be sneaky expensive. Summer spending on camps, travel, dining out, and activities can add up fast. A loose summer budget isn’t a buzzkill, it’s what helps keep September from being a financial hangover.
- June 28: National Insurance Awareness Day – Life can change quickly and policies become out of date. A reminder to review your Home/Renters, Auto, Life, and any other insurance policies you have to make sure they are accurate and up to date.
- Office Closure Reminder: Please note that our Two Bird office will be closed on Friday, July 3rd in observance of the July 4th holiday which falls on Saturday this year.
Welcome back to Bird’s-Eye View!
Our focus this month is on Income Planning during Retirement. Successful retirement income planning often comes down to knowing where your money is coming from, making it last, and keeping as much of it as possible away from taxes. Read on for a closer look at our thoughts on building a stable income foundation, managing portfolio withdrawals, and making more informed decisions about which accounts to tap and when.
Your financial plan can open the door to a fulfilling retirement, but your health is what lets you walk through it. Read on to learn simple, practical steps from physical therapist, Radhika Bhagat, on how staying active today can lower medical costs, preserve your independence, and help you fully enjoy the retirement you worked so hard to build.
We’re grateful to be your trusted team and look forward to connecting soon. If this month’s content brings any curiosities, we encourage you to reach out to your advisor.
Making the Most of What You’ve Saved
Phil Hollander CFP®, Wealth Strategist
Managing income in retirement begins with identifying your guaranteed income sources like Social Security and pensions, and aligning them with your fixed, non-negotiable expenses. The goal for most people is to cover your essential spending with predictable income so that your investment portfolio is never forced to sell assets at a bad time. If there is a gap between guaranteed income and essential expenses, that gap becomes the first problem to help solve through careful portfolio planning and thoughtful Social Security timing. Getting this foundation right can help reduce stress and bring clarity to every other retirement income decision.
Your investment portfolio serves as the engine for discretionary spending, inflation protection, and legacy goals. A useful framework is to think in buckets, with near-term cash reserves covering one to three years of withdrawals, a middle layer of more conservative investments, and a long-term growth allocation that has time to recover from market downturns. A well-diversified portfolio spread across different asset types and sectors can also give you more flexibility during withdrawals, since you are less likely to be forced to sell something at a loss when one part of the market is struggling. Withdrawal rates matter significantly, because spending too aggressively early in retirement can create real risk that early market losses could permanently reduce the portfolio’s ability to support you later. Revisiting your withdrawal rate each year, particularly after a down market, is one of the most important habits in retirement income management.
Taxes are often the most overlooked part of retirement income planning. Every dollar withdrawn from a traditional IRA or 401(k) is taxed as ordinary income, and the interaction between those withdrawals, Social Security benefits, and Medicare premiums can potentially create surprisingly high tax bills. Strategic Roth conversions in lower-income years and being thoughtful about the order in which you draw from different account types are tools that can reduce your lifetime tax burden in a meaningful way. Drawing from taxable accounts first, tax-deferred accounts like IRAs next, and Roth accounts last is a common starting point that works well for many retirees.
If you have questions about your retirement income strategy or want to talk through what this looks like for your specific situation, we encourage you to reach out to our team.
Converting from a traditional IRA to a Roth IRA is a taxable event.
Guest Contributor: Radhika Bhagat, PT, MPT, Cert DN, Director, Care2Cure Physical Therapy
How Can Your Health Help Improve Wealth Over Time?
As we get closer to the season of life where we can truly enjoy the fruits of our labor, many people focus heavily on financial investments, retirement accounts, and savings goals. Yet one of the most overlooked investments is also one of the most valuable: your health.
Believe it or not, good health can help improve your wealth over time. Staying active and healthy can reduce medical expenses, increase independence, and allow you to fully enjoy the retirement you worked so hard to achieve.
Many of us place our health on the back burner while balancing careers, raising children, caring for aging parents, and managing daily responsibilities. However, our health deserves a place at the top of the priority list because it can directly impact our quality of life in retirement.
Think about your goals for retirement. Do you hope to travel, garden, enjoy hobbies, or play with your grandchildren? All these activities require a healthy body with strength, endurance, balance, and mobility. Financial freedom means little if your health limits your ability to enjoy it.
The good news is that investing in your health does not have to be complicated. Small, consistent habits can make a significant difference over time. Aim for physical activity and strength training 2–3 days per week for at least 30 minutes a day. You can alternate between cardio and strength training exercises to maintain a good balance while keeping variety in your training.
Walking is a simple exercise for any age that can be done indoors or outdoors. The key to walking is to pace yourself fast enough to get your heart rate up to a therapeutic level. To achieve this, a good indicator is that it should be slightly difficult to maintain a conversation while walking. Running, biking or playing sports are additional examples of cardiovascular exercise.
Yoga and/or Pilates are good examples of strength and flexibility activities. Yoga does not require a lot of additional equipment and can be done at home or in a studio. Going to a gym, using weights and/or resistance bands can also be used for a strength training program. Knowing how much resistance to use is always tricky for most. You should be able to perform 3 sets of 10 repetitions and be fatigued at the end of your third set for it to be a good resistance. Normal muscle soreness should subside in 24–48 hours after working out. Walking, stretching, resistance exercises, and maintaining flexibility can all help preserve mobility and independence as we age.
Retirement planning is not only about pursuing financial wealth, it is also about building the health needed to enjoy it. The greatest return on investment may come from taking care of yourself today so you can fully live tomorrow.
Your retirement plan should account for both your financial and physical wellbeing. If you’re ready to get proactive about your physical health, whether that’s improving mobility, managing pain, or simply maintaining your quality of life, reach out to the team at Care2Cure Physical Therapy.
Contact Radhika: 734-580-2046 | [email protected]
Radhika is not affiliated or registered with CWM, LLC or Cetera Wealth Services LLC. Any information provided by Radhika is in no way related to CWM, LLC or Cetera Wealth Services LLC or its registered representatives.
Additional Resources & Reading
Fact Sheet: Retirement Income Plannin
Retirement income planning can feel overwhelming, but the right framework helps make it manageable. This fact sheet walks through some key factors and practical next steps for building a plan you can feel confident in.
Article: Don’t blow your budget! Tips to Create Your Retirement Spending Plan. Even well-planned retirement budgets can fall short once the structure of a regular paycheck disappears. This piece explores why that happens and how to build a spending plan that can hold up in real life.
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This newsletter is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.
The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Wealth Services, LLC cannot guarantee or represent that it is accurate or complete.
