Planning for Required Minimum Distributions

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Tax deferral is a powerful wealth-building tool, enabling individuals to delay paying taxes on their investment earnings and allowing more of these earnings to compound over time. But unlike diamonds or that cast-iron skillet that you inherited from your grandmother, tax deferral doesn’t last forever. Planning for required minimum distributions (RMDs) is an important part of a sound retirement income plan. Continue reading

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Retirement Planning: Claiming Social Security Benefits

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In our most recent blog post, we discussed the import role that Social Security benefits play in the retirement income plan of most Americans, and provided a framework for understanding the various types of benefits. While sometimes dismissed as inconsequential, Social Security benefits provide a critical source of guaranteed income for most retirees. To wit, Social Security benefits comprise over fifty percent of the retirement income for two-thirds of current retirees and, critically, allow many seniors to live independently. In this blog post, we review how Social Security benefits are taxed and provide guidance on how and when to claim benefits. We encourage readers to review our previous blog post, A Primer on Social Security Benefits, as it provides important information that will aid in your understanding of the strategies outlined below. You can find that blog entry by clicking here.

To begin, an understanding of Social Security retirement benefits requires reviewing a few common terms that are key to making informed claiming decisions.

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Using Deferred Income Annuities For Retirement Income

Those approaching retirement are looking for ways to provide lifetime income; a recent ruling from the United States Department of the Treasury has placed renewed attention on the use of deferred income annuities, also known as longevity insurance, in a retirement income plan.

First, A Little Background

Deferred income annuities are generally paid for with a single-premium and income payments commence after a minimum of one year. The recent Treasury ruling allows participants  in a 401K or Traditional IRA retirement account to use the lesser of twenty five percent of their account balance or $125,000 for the purchase of a qualifying deferred income annuity. Income from the contract may be postponed up to age eighty five and will be excluded from Required Minimum Distribution calculations.

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Buckets, Flooring And Structured Withdrawals: Creating A Dynamic Income Plan

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Turning accumulated assets into a reliable income stream is THE critical issue facing retirees. A growing body of research, and memorable terminology, has provided financial planners with the ability to help our clients create a dynamic income plan that best suits their needs.

While each client has a unique set of circumstances, having adequate income to maintain a given lifestyle in retirement is a near universally shared goal. Likewise, many clients will face similar obstacles and challenges throughout retirement. Our job as advisors is to assist clients in identifying their retirement goals, risks, income sources and expenses, and to combine these to help create an income plan that can be revised and adapted over time. In this blog, we will outline three distinct approaches to retirement income planning.

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