Retirement Planning Doesn’t End at Retirement

In anticipation of this monumental event, you’ve worked hard throughout your career to make smart retirement planning decisions and build a nest egg that’ll provide financial independence for the rest of your life. You’ve rolled over and consolidated employer retirement plans into IRAs, you’ve decided when to begin receiving Social Security benefits, and you’ve met with an estate attorney to ensure that your legacy wishes are up to date. All done, right? Well, as former college basketball player and coach Abe Lemons has been quoted as saying, “The trouble with retirement is that you never get a day off.” Therefore, during retirement, it’s very important to revisit your financial plan annually—or as frequently as your situation or wishes change.

Retirement planning – Your lifestyle

Planning your retirement lifestyle is something that’s often overlooked, causing some retirees to come up with their retirement identity on the fly. Your new lifestyle will likely be quite different from your friend’s or neighbor’s; thus, the retirement planning involved to ensure a successful retirement will be different as well. There are a lot of questions to ask yourself. Do I see myself staying in my current home, or should I move? Do I plan to remain in the same state or live closer to my children? Do I want to travel more? If your answer is to move to a new home, you should be sure to understand how this change will impact your financial situation. The state in which you decide to establish residency may also have a significant tax impact on your income and potentially how your assets should be titled for estate purposes. Increased travel could mean higher levels of spending compared to when you had a regular paycheck, so be sure to include a conservative expense assumption in your financial independence analysis. Should you reward yourself and splurge in retirement? Absolutely—you deserve it, but make sure to do it with confidence and financial responsibility every step of the way.

Retirement planning – Replacing your paycheck

How you pay yourself in retirement can have a significant impact on the longevity of your assets. In order to replace your previously earned income, you’ll need to develop a plan that takes into consideration opportunity cost and tax efficiency. There’s no magic number, but most retirees should have approximately six to 12 months’ worth of expenses held in cash. For planning purposes, it’s important to understand what your expenses and sources of income will be for the next three to five years. Immediate cash needs could be kept in a high-yielding checking or savings account, while the rest of your liquid assets could be invested in a globally diversified portfolio of stocks and bonds. Bonds can provide you with the stability needed for sustained cash distributions in down markets, while stocks provide you with the opportunity for the capital appreciation needed to grow the base of your portfolio to help last your lifetime.

Changes in your tax bracket

For individuals who retire prior to age 70, you may suddenly find yourself in a much lower tax bracket. These “gap years” present a great opportunity to take advantage of and maximize the benefit of being in a lower tax bracket. The IRS requires that you begin IRA distributions between ages 73 and 75, depending on when you were born. These Required Minimum Distributions (RMDs) will be taxed at ordinary income tax rates. In addition to RMD income, many retirees also begin taking their Social Security benefits at age 70. The combination of these income sources may result in a much higher marginal tax rate, sometimes as high as when you were employed. One way to reduce future RMDs—and perhaps reduce future taxes—is to take opportunistic IRA distributions in the form of withdrawals or Roth conversions. Consult with your Corient Wealth Advisor and tax professional to see what strategy is suitable for your circumstances.

Gifting assets in retirement

Many successful retirees are passionate about giving back to their alma mater or supporting charities that align with their beliefs. Others have the desire to help the next generation get a head start by contributing to tuition or the purchase of a first home. If you’re interested in gifting to charity or family members, we recommend first sitting down with your Corient Wealth Advisor to determine the amount that you can reasonably gift—either in a lump sum or on a regular basis. Once an amount is determined, the next step is to optimize your gifting strategies in the most tax-efficient way. Potential strategies could involve contributing highly appreciated stock to a donor-advised fund, directing RMDs to charity through qualified charitable distributions or gifting cash to family members.

Keep your estate plan up to date

As you continue to age throughout retirement, be sure to keep your estate plan relatively fresh. We recommend revisiting estate documents every three to five years or as often as your situation and the laws change. No matter where you establish residency, your will should remain valid. However, laws may vary from state to state and may invalidate certain clauses in your will. 

At Corient, we specialize in partnering with families to help plan for all the expected and unexpected circumstances in retirement. Let us know how we can help with your retirement planning.


Peter O'Neill, CFP

Peter O'Neill, CFP

Wealth Advisor

Pete counsels and advises families and individuals on holistic financial planning. His areas of expertise are in retirement planning, income tax planning, investment management and estate planning. Pete joined RegentAtlantic in 2019, and has more than ten years of experience working with high-net-worth families and individuals. He is a member of the Financial Planning Committee and actively contributes to discuss and enhance best practices for advisors providing holistic financial planning advice.

Pete graduated from St. Joseph's University where he earned a Bachelor of Science in Finance. He is a CERTIFIED FINANCIAL PLANNERTM, having received the designation from the Fairleigh Dickinson University. Pete was born and raised in New Jersey, and today he and his wife Paige live in Bridgewater with their two boys. In his free time Pete enjoys trying new restaurants and collecting wine. As a sports enthusiast, I'm a Yankees, Giants and Knicks fan and continue to work on my golf game.


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