3 Things No One Tells You About Retirement

Retirement planning is about much more than simply saving enough money. It’s about creating a strategy that provides income you can count on, minimizes unnecessary taxes, and helps you manage the wealth you’ve worked so hard to build.

Here are three things many people don’t learn until it’s too late:

1. Guaranteed Income Matters

Most people enter retirement with a 401(k) or similar portfolio made up primarily of stocks and bonds. This type of risk-based portfolio can work well during the accumulation phase of your life because your primary objective is growth—and you’re continuing to contribute through your paycheck.

But retirement changes everything.

Once you stop working, you are no longer making contributions. Now you are withdrawing income from your portfolio. A market downturn combined with ongoing withdrawals can permanently reduce your portfolio’s ability to recover—a risk commonly referred to as sequence-of-returns risk.

For generations, retirees have relied on sources of guaranteed income such as pensions and Social Security. Today, fewer people have traditional pensions, making income much more uncertain.

Fixed or fixed-indexed annuities with appropriate guaranteed lifetime income features may be one tool to consider for creating a predictable stream of lifetime income. This can help cover essential monthly expenses, while the portion of your portfolio that isn’t needed for guaranteed income can remain invested for growth and help address inflation.

The goal is a balanced retirement strategy—one designed not only for growth, but also for income, stability, and peace of mind.

2. A Tax Preparer Is Not the Same as a Tax Planner

Your tax return tells you what happened last year. Tax planning helps you determine what you can do today to reduce or eliminate future taxes.

With the national debt continuing to grow, future tax rates are an important consideration for many retirees. 

What happens to your retirement income if taxes increase?

Remember, it’s not how much you make that determines your standard of living, it’s how much you get to keep. Building tax-free income can help you possibly keep more of your retirement.

3. Legacy Planning Is Different from Estate Planning

Estate planning involves tools such as wills, trusts, and beneficiary designations to help determine where your assets go and, to avoid probate.

Legacy planning goes a step further.

It focuses not only on who receives your assets, but also on how much they receive, when they receive it, and how taxes may affect what they ultimately keep.

For example, inherited retirement accounts can create significant tax considerations for your heirs. Under current federal rules, non-spouse beneficiaries are required to withdraw inherited retirement account assets within 10 years, although the specific rules can vary depending on the circumstances.

Without proper planning, a significant portion of the wealth you worked a lifetime to accumulate could go toward taxes rather than to your family.

You’ve worked too hard for your money to leave your legacy to chance.

Our office helps clients explore strategies designed to address income, taxes, and legacy—so their retirement plan is built around more than simply accumulating a portfolio.

Have Questions About Your Retirement?

If you have questions about any of these issues, we invite you to call our office at 810-232-2300 for a complimentary, confidential consultation. We can help you understand your options.

We have three office locations to serve you: Flint, Howell, Lake Orion.

Alliance Financial Group, Inc.

Investment Advisory Services offered through Redhawk Wealth Advisors, Inc., an SEC Registered Investment Advisor. SEC Registration does not imply any level of skill or understanding. Insurance and annuity products sold separately through Alliance Financial Group, Inc. Alliance Financial Group and Redhawk Wealth Advisors are unaffiliated and separate legal entities.