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More In The Bank or Bigger Social Security Check?

Season #2

More In The Bank or Bigger Social Security Check?

When planning for retirement, one of the biggest concerns is having enough money to support oneself during the golden years. People often wonder whether it's better to have a large bank account or rely on a guaranteed income, such as a social security check, for a secure retirement.

However, in my option, the real question you should be asking is not which option is better, but rather which one will give you the life you want.

Having a large bank account can give you a sense of control over your finances, while a guaranteed income can provide peace of mind knowing that you will receive a set amount of money each month.

Ultimately, both options will need to be converted into an income stream in retirement. Whether you trust the government to provide inflation-adjusted social security benefits or prefer to rely on a private insurance company, the important thing is to consider how you will turn your savings into a reliable income source.

Of course, the answer to this question will vary depending on each individual's unique circumstances and preferences. Some people may prefer the security of a guaranteed income, while others may prefer the flexibility and control that comes with having a large bank account.

In the end, the most important thing is to carefully consider your options and make a decision that aligns with your personal goals and values. Whether you choose to rely on a guaranteed income, build up your savings, or some combination of both, the key is to have a plan in place that will help you enjoy a happy and fulfilling retirement.

File Early or File Late? Which Is The Right Option?

The first step is to determine what you want to accomplish and how much money they need to achieve those goals. I work with each client to determine their concerns and aspirations, and then we create a plan to make those dreams a reality. I have enough tools in my toolbox to help most people achieve their retirement goals, regardless of their financial resources.

I always tell my clients that I don't have all the answers, but I have the experience and expertise to run the numbers and analyze their financial situation. Together, we go through the analysis from start to finish, which will tell us what decisions we need to make.

The goal is to make the decisions so simple that they smack you in the face as being the right choice. We will determine when to file for social security, which accounts to use, and where to take the money from, so the client can retire with peace of mind.

Is The Filing Decision Always Obvious?

Most people are very aware, but what's interesting is that as people have more money the decision actually gets harder. Let me explain. When you stop working? You have time on your hands and you want to do things with We need more money in retirement than we anticipate.

Now, most people know the areas that they don't know...and that's why they seek out a financial advisor, to help them address those questions. In answering those questions though, we may uncover false assumptions or myths and misconceptions that may actually be holding us back from maximizing our retirement resources.

Let me give you an example,

One client I worked with had two million dollars in his accounts, but was paying tens of thousands of dollars in unnecessary taxes because he was trading in the wrong accounts. By making some simple adjustments, he could have saved a significant amount of money. These kinds of financial considerations can also impact decisions about filing for social security.

As a financial advisor, it is my job to help people understand and address these fundamental questions and considerations in order to make informed decisions about their financial futures. By doing so, we can uncover new opportunities and ensure financial stability and success throughout retirement.

Which Accounts Should You Spend Down First?

 In planning for retirement, there are various strategies and decisions to consider. One important factor is social security and when to begin taking it. Another key aspect is how much to withdraw from retirement accounts, such as taxable traditional accounts, non-taxable Roth accounts, and taxable brokerage accounts.

The order and timing of these withdrawals can impact the amount of taxes paid in retirement. Therefore, a distribution strategy is crucial in maximizing the amount of money kept in retirement. This is often more important than focusing solely on accumulating the most money possible.Some rules of thumb;

Spend Down Your Retirement Accounts First!

Reduce your traditional retirement accounts as much as possible, because those are gonna have required minimum distributions. The way required minimum distributions are set up is that it is a escalating amount. It's designed to deplete your account. By time you reach, it's 110 or 115, It's supposed to be zero at that point, which means that every year the amount that Congress requires that you take increases.

The Key To Success

You need to have a decision making process for how you make these decisions. Because whether it's to buying a new car, whether it's where to take your income in retirement, whether it is doing a Roth conversion or not, you need to have a process for making those decisions.

And you need a way of knowing how it'll impact you today, tomorrow, and long into the future. And that is something that we help our clients do. I really highly recommend take a advantage of our Retirement & Tax SWOT analysis. We'll go through. We'll show you our process for doing that and help you make those decisions.