Page 8 - Palm Beach Vol 6 No 2

Wealth Management
Retirement Planning in Today’s World
PBy Julie Clairmont-Shide
lanning for retirement, whether you are 25 or 65, is so very important and tricky. If it is done right, you should have many options later in
life. If you’ve waited to fund adequate retire- ment, it still may not be too late, albeit, you may not have as many options. Some of our clients have had to put o retirement longer than expected, but happily, still enjoy their work and remain healthy. Others have had to make choices that are not nearly as appealing as they’d prefer.
is article addresses several issues around the retirement funding challenge. Having a blend of di erent assets capable of produc- ing income by the time you retire, both tax- able and tax-deferred, is optimum in order to avoid remaining in a high tax bracket upon retirement. Besides aggressively funding any deductible and/or tax-deferred vehicle avail- able to you, additionally, using a regular in- vestment account has many advantages as well. For those of you who have a dual goal of both passing money onto your heirs and funding retirement, a regular investment ac- count has the advantage of both providing ways to use capital gains and other more ef- cient forms of cash distributions as well as providing a step-up in cost basis upon death, thus maximizing your assets for your heirs.
Many factors a ect investment and retire- ment assets.
it is important to comprehensively review your spending budget and life-style. Too many retirees fail to adjust their spending to match the cash ow
Julie Clairmont-Shide is a Senior Vice President, Wealth Advisor and CERTIFIED FINANCIAL PLANNERTM for The Harbor Financial Group at Morgan Stanley in Boca Raton, Florida, a team of portfolio managers and wealth advisors that help a uent investors protect and simplify complex wealth with orchestrated nancial care. Julie Shide has 30 years of experience in nancial services with specialized training in nancial and estate planning. Julie Shide is a Wealth Advisor with the Wealth Management division of Morgan Stanley in Boca Raton.
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Reverse Dollar Cost Averaging
is occurs when you begin making withdrawals from your assets. Investments are sold on a regular basis regardless of the price per share. If share values are low, the strategy sells more shares to get your pre- determined withdrawal amount than when share values are high. Withdrawing money on a regular basis during volatile and nega- tive markets has a compounded negative impact on the portfolio, forcing the inves- tor to save more than originally planned during the accumulation phase.
Withdrawal Rates
According to nancial planning guide- lines, the new paradigm for retirement funds withdrawal rates have signi cantly decreased. For investors early in their re- tirement, recommended withdrawal rates has been reduced from 4-5% to a more modest 2-3% annually due to historical low interest rates and prevailing equity divi- dend distribution rates.
Asset Allocation
Most investors have a high probability of living longer than expected, even more so when the household includes a spouse or signi cant other. At age 66, one or both retirees may live well into their 80s or 90s. at requires another 20-30 years of need- ed cash ow from the portfolio. erefore, keeping an important component of your investment in growth vehicles as well as cash ow positions is imperative.
Budget and Lifestyle
At the time of the important life tran- sition to your retirement, it is important to comprehensively review your spending budget and lifestyle. Too many retirees fail to adjust their spending to match the cash ow capable of being produced by their retirement assets and get into serious - nancial trouble. is can result in being forced to make unwanted drastic changes in spending and lifestyle.
Early Retirement
If you wish to retire before the age of 59 1⁄2 and have done a good job of deferring