Wealth Management and Risk Mitigation
Investment Planning
Retirement Planning
FAQ
Q
What is the best strategy for Social Security?
There is no universal “right age” to claim benefits. The optimal strategy depends on
several personal and financial factors, including your cash flow needs, health and family
longevity, marital status (married, divorced, or widowed), and the availability of other
income sources. The performance of your investments and your plans for continued
work also play a critical role.
Understanding the rules is essential. Once you reach full retirement age, you may work
and earn unlimited income without any reduction to your Social Security benefit.
However, claiming benefits before full retirement age while continuing to work can result
in a temporary reduction due to the earnings test.
Because Social Security provides lifetime, inflation-adjusted income, the decision of
when and how to claim should be approached strategically. For most retirees, it is one
of the most consequential financial decisions they will make, and careful analysis can
materially improve long-term retirement security.
We can help calculate your benefit at different claiming ages, identify your break-even
points, and model multiple scenarios to evaluate the trade-offs. A personalized Social
Security analysis can help you make a confident, informed decision that supports your
broader retirement plan. If you are approaching retirement or already receiving benefits,
now is the time to review your strategy and ensure it is aligned with your long-term
financial goals.
Q
5 Major Retirement Regrets (That Are NOT Inevitable & How to Avoid Them)
When are you going to retire?
How did you make that decision?
Many of us look at finances and health when we’re deciding when to retire.
Whether or not we realize it, we’re also considering our emotions and what we imagine for the future — we compare how we feel in our current circumstances to how we expect to feel in our anticipated retirement.1
With that, we tend to overestimate our future emotions, thinking we’ll be a lot happier as retirees.1
And that can motivate short-sighted decisions that lead to more regrets than satisfaction in retirement.1
To avoid that and make better decisions about retiring, let’s look at some of the leading retiree regrets, what’s behind them, and what you can do now to set yourself up for a dream retirement later.
Retirement Regret #1. Retiring Too Early
Retiring as soon as possible can be a priority, but retiring too early can be a big mistake. For one, premature retirement can mean gambling with your financial security in the future. If you leave work too early, you could be forfeiting some key, higher-earning years to build up your savings.
Beyond that, retiring too early can turn the page on your social life or drain a sense of purpose if you’re not prepared for the next stage.
Pro Tip: If retiring early is a goal, consider a phased retirement that lets you work part-time while you transition into retired life. A phased approach could let you continue to earn income, stay connected to your social life, and wade into retirement (instead of taking an instant plunge).
Retirement Regret #2. Sidelining Retirement Plans for Too Long
Retirement planning can stall when we think we have years or even decades to put plans in place. Unfortunately, the longer you wait to start retirement planning, the more challenging it can be to build the nest egg you may need.
That, in turn, could leave you with less retirement savings and far less flexibility later. It may also mean that you have to make more tradeoffs and more difficult decisions later, like foregoing certain luxuries or bucket-list adventures.
Pro Tip: No matter how old you are now, start planning for retirement. Your strategies and objectives can evolve over time, but the sooner you take a hands-on approach to mapping out your retirement, the better. Time can be an invaluable resource in retirement planning that you can’t get back. So, give yourself as much time as possible.
Retirement Regret #3. Underestimating the Length of Retirement
How long will you need to live off of your retirement savings? If you don’t know the answer to that question, how can you save enough for retirement? That’s another major issue today’s retirees face because many lack “longevity literacy.”2
In other words, we tend to have a poor sense of how long we’ll live. Failing to consider that in retirement planning can really short-change us in the long run.2
Pro Tip: Don’t look to your parents or ballpark estimates when it comes to life spans and the duration of retirement. Crunch the numbers and look at the latest life expectancy data (it does change from generation to generation). Also, work with a professional who can help you double-check your estimates, assumptions, and calculations.
Retirement Regret #4. Overlooking Inflation
Inflation is an inevitable part of the market cycle, and it’s almost impossible to ignore these days.3 Still, inflation can take more of a back seat in retirement planning, with many people making the mistake of relying on today’s costs when estimating tomorrow’s expenses.
Just like underestimating the length of retirement, underestimating inflation can put a real drag on retirement savings, creating unnecessary financial stress in the future.
Pro Tip: Don’t forget to account for rising costs when you’re planning for retirement. Use current projections to estimate future inflation. Then, create a budget for yourself in retirement, estimating your costs so that you have a more realistic idea of how much you need to cover your monthly expense as a retiree. Also, revisit these estimates regularly, updating them as needed. Keeping an eye on inflation can keep you mindful of savings goals and the expenses you need to be prepared for in retirement.
Retirement Regret #5. Not Having a Sound Investment Strategy
What’s your current strategy for building your retirement savings? When will it be time to adjust that strategy?
Believe it or not, many people have a set-it-and-forget-it view of retirement planning. They know they need to save and that they want to retire, but they’re not necessarily thinking about risk tolerance or how aggressive to be at various phases of retirement planning.
That can result in lost opportunities to amplify retirement savings, like missing out on employer contributions and options to make catch-up contributions.
Pro Tip: Automating savings is a good start, but it shouldn’t be the only part of your retirement planning strategy. Bolster that with diversified investments and routine reviews of both your strategies to ensure they continue to work for you.
A Better Path to a More Fulfilling Retirement
Retirement is a complex financial decision that’s also deeply personal. As exciting as it can be to cross the “finish line” of work life and retire, timing it right matters. So does sensible planning that takes a realistic approach to your needs and goals for the future.
So, if you’re serious about setting the stage for a comfortable retirement unburdened by regrets, don’t cheat yourself by cutting corners or assuming you know it all now.
Instead, look at retirement planning as a work in progress and equip yourself with the resources you need to make more solid plans for the future. That can include deeper knowledge about retirement and finances. It can also involve the support and guidance of an experienced financial professional.
Sources
This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright
Q
Should I Consider a Roth Conversion?
A Roth conversion may be worth considering if you expect to be in the same or a higher
tax bracket in the future, want to reduce future required minimum distributions (RMDs),
or are looking to create tax-free income later in retirement. By converting a portion of a
traditional IRA or pre-tax retirement account to a Roth IRA, you pay income taxes today
in exchange for tax-free growth and withdrawals in the future.
Roth conversions are often most effective during lower-income years—such as early
retirement before Social Security and RMDs begin, after a job change, or in years with
unusually low taxable income. They can also be a valuable estate-planning tool, as
Roth IRAs are not subject to RMDs during your lifetime and can provide tax-free
benefits to heirs.
However, conversions are not appropriate for everyone. Paying the tax upfront can
increase current-year tax liability, potentially trigger higher Medicare premiums (IRMAA),
or affect other tax-based benefits. The decision should be evaluated in the context of
your cash flow, tax brackets, long-term retirement income plan, and overall financial
picture.
Because the cost of getting this wrong can be significant, Roth conversions
should never be done without a strong plan addressing the multiple issues that
you may face. The window to act is often limited, and once missed, it cannot be
recovered. Before making assumptions or taking action, schedule a personalized
Roth conversion analysis to quantify the tax savings, identify the optimal
conversion amount, and determine the right timing. A personalized tax analysis
can identify whether a conversion strategy adds value—or creates unnecessary
tax exposure. Roth conversions can permanently reduce lifetime taxes—but only
if executed correctly.
Traditional IRA vs. Roth IRA as part of your estate:
A traditional IRA can be left to a spouse subject only to a RMD Required Minimum
Distribution. However, when your heirs inherit the IRA, the account must be liquidated
within a 10-year period and RMD’s may need to be taken. The taxes can be significant
and potentially add additional taxes to other earnings. An inherited ROTH IRA has no
RMD’s, does not need to be liquidated until the end of the 10 years following death. The
fund continues to grow and accumulate tax free.
A single coordinated strategy today can add tens—or even hundreds—of
thousands of dollars, to your after-tax retirement income.
Schedule a consultation to review your current tax bracket, future income
projections, and determine whether a Roth conversion strategy fits your
retirement plan.
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I am happy to endorse Jim Moniz and Kate Leonard of Northeast Wealth Management. They have been extremely helpful in establishing and managing my portfolio of financial and personal affairs. Their programs are simple, comprehensive and affordable.
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I have worked with Northeast Wealth Management since 2004. We first met when I needed help with my mother’s estate planning, then settling her estate. Since then, we have worked on special needs planning for my disabled daughter, estate planning for
my husband and I, then when I needed help with Alzheimer's care for my husband, Jim and Kate were right there with me, helping me find day care, then memory care and finally, unfortunately, support at his passing. Jim and Kate have become my support system when I feel overwhelmed and my trusted financial advisors when I need help with financial planning. They are more than a financial wealth management team, they are supportive, knowledgeable, and trustworthy.
Anthony M.
Jim and Kate are wonderful to work with. Over the past two years, they have treated us with personalized attention and have provided great financial insight. I have had some atypical investment scenarios occur related to my RSUs and Jim has gone
the extra mile to help me sort them out. Jim is personable, professional, and incredibly knowledgeable. I recommend considering Northeast Wealth Management for your own portfolio guidance whether you need wealth management, stock options, real estate investment, or financial planning assistance.
Debi A.
I started working with NE Wealth Management in 2008. Their office was in the same building that I worked in. I had a question about rolling over an IRA from a previous employer. We setup an appointment and the rest is history. Jim and Kate are great to work
with. Most importantly to me is they listen to me. I would highly recommend NE Wealth Management for your estate and financial planning needs. Fifteen years later, I am now retiring with a healthy portfolio. I can't thank you both enough.