For most of your working life, the job was simple: earn it, save some of it, and don’t touch the pile. Then the paycheck ends and the job flips. Now the portfolio has to pay you, and nobody hands you a new set of rules. We help people work through that question.
How do we turn savings into a paycheck?
We start with the number everything else rests on: what you really spend in a year, the regular bills plus the lumpy ones like taxes, insurance and the trip you’ve already promised somebody. Our retirement planning services typically include projections based on your financial goals. If the projections show less than you’d hoped, we can show you what happens to them when certain variables change: working longer, saving more, spending less or taking more risk with investments. If you’re near retirement or already retired, we may advise on distribution strategies for your retirement years.
Where does the income actually come from?
A diversified portfolio can produce returns in two ways. Some of it shows up as interest and dividends, and some shows up as growth in the value of what you own. Together, that’s total return. Once you see it that way, selling a little of something that has increased in value looks different: most of the time you’re collecting part of what the portfolio produced, not raiding the principal. A portfolio built around whatever pays the most today can leave very little room for growth, and retirement can last a long time. Peter wrote more about this in When the Paycheck Stops, Where Does the Income Come From?.
What keeps a bad month in the market from changing your plans?
Cash. We may recommend a cash reserve for money you know you’re going to spend within the next year. Cash includes savings accounts, CDs and money market funds. A cash reserve for near-term spending may reduce the need to sell investments during a rough stretch in the market. When the cash needs refilling, we look at what has grown past its predetermined share of the portfolio and bring you a suggestion. Nothing gets sold until you’ve said yes.
How do taxes fit in?
Where the money comes from matters for taxes. Withdrawals from a taxable account and from a retirement account are generally taxed differently, and a lower-income year can change which source makes sense. That depends on your own situation, so talk it through with your tax professional. We don’t offer tax preparation, but we’ll work with your tax professional to help structure your financial life to identify tax-saving opportunities. That can include recommendations on which type of account or which specific investments should be owned, based in part on their tax efficiency. We also keep our clients informed of the latest changes in tax law and assess the impact on their financial plans.
What does working with us look like?
We’re a fee-only firm and we don’t receive commissions. Our fee schedule is on our FAQ page. We manage investments under a non-discretionary agreement, which means your prior approval is needed for each transaction. We monitor and rebalance investments, review all portfolios quarterly and encourage clients to meet with us at least annually. Retirement planning is one of the services we offer, alongside evaluating tax strategies, insurance analysis and estate planning assistance.
Ready to take the next step? Request a consultation.