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Navigating Retirement: The Critical Role of Financial Planning in Your Golden Years

By Marjorie L. Rand, CPA, CFP®, RICP®

I have found over the years that many people seek out “retirement planning” and assume that if they put a plan in place, they can officially retire with ease. However, to protect your hard-earned nest egg once you retire, there is much to carefully maneuver through and at the same time, many opportunities to take advantage of right after and throughout your retirement years.  

Take a moment to think about how much the world has changed in the last 4 years, let alone 20 years! From global recessions and pandemics to spikes in inflation to the rising cost of medical care, it’s easy to see how drastically the world can threaten even the strongest retirement plan. There are also, however, many opportunities to boost savings and generate income while enjoying your retirement. In fact, continued financial planning after retirement can open up whole new avenues of investment and prosperity. On a practical level, it helps you stay solvent amid evolving tax laws, new legislation, and life changes.

The truth is that your retirement plan should be a living entity, something that is molded and shaped as threats and opportunities present themselves. Here are a few reasons why it’s important to continue financial planning – even after you’ve retired.

Inflation and Changing Interest Rates

The Consumer Price Index (CPI), a measurement of the cost of living in America, is always incrementally rising—and the primary culprit is inflation. Unless retirees stay alert and keep a close eye on inflation, they might see their nest egg threatened and even find it difficult to meet basic needs.

Changing interest rates is a particular threat that can quickly impact your retirement plan. When interest rates rise, the value of many investments goes down, such as certain kinds of bonds and pension payouts. If you don’t keep a close eye on interest rates, diversify your portfolio accordingly, and make changes when necessary, the value of your investments could change significantly.

Dedicated financial planning with the help of a financial professional can help you navigate the rising tides of inflation and the roller coaster ride that is interest rates. An advisor can find strategies and funds that can keep you afloat in retirement, adjusting your overall financial plan to adapt to changes in your goals.

Healthcare Expenses & Longer Life Expectancy

Americans are living longer these days and with advancements in medicine and technology, life expectancy will likely continue to go up. While this is good news, the harsh reality is that the longer you live, the more money you need and the more you risk outliving your savings.  

A longer life span also opens you up to more medical conditions and with high healthcare costs which will likely continue to rise, planning for these expenses can be difficult. Assisted living, nursing homes, and long-term care also cost seniors a pretty penny.  

You don’t have to navigate this alone though. Whether it’s paying for medical expenses in tax-efficient ways, updating your insurance plans, or preparing for long-term care, having a trusted financial advisor to help you stay on top of your finances throughout retirement can offer stability for your healthcare expenses to help ensure your savings last.

Tax Efficiency

Taxes are murky enough when you’re working, and it’s not necessarily any easier in retirement. The last few years have brought Social Security tax increases, updates to required minimum distributions (RMDs), and changes in tax credits and deductions for seniors. It is very important to stay on top of the seemingly never-ending changes in tax laws.  

Taxes are one of the largest expenses in retirement. Even if you begin your retirement with a tax-advantaged retirement plan, there are still plenty of ways to improve your tax status and maximize your investments throughout your retirement. Relying on a financial advisor with tax expertise will help you stay aware of tax law changes, avoid potentially costly mistakes, and help you take advantage of new financial opportunities.   

Market Volatility

When retiring, many people put their portfolios on cruise control. But this approach ignores the threat of market volatility. Many events, foreign and domestic, can quickly result in economic uncertainty and drastic changes in the stock market. If you’re not careful, these sudden changes can hurt your investments and post-retirement income. Even if you keep a close eye on the market, you might overcorrect and sell off underperforming stocks at a loss far too soon. 

Periods of sharp movements and market uncertainty are inevitable. Reviewing your portfolio periodically with a financial advisor to adjust asset allocation can guard against heavy losses. With diverse portfolios and strategic capital management, retirees can fine-tune their portfolios to steady the ship during tough times. 

Services for Retirement Planning

What kinds of retirement planning functions can help you optimize your financial health? Some of the most common and beneficial services include:

  • Adjusting your overall financial plan to adapt to changes in your financial goals
  • Rolling over to a Roth IRA to limit taxes on withdrawals
  • Anticipating and planning for future tax changes
  • Running projections in cash flow and income tax
  • Reviewing your portfolio periodically to adjust asset allocation
  • Receiving guidance on estate planning and insurance
  • Making plans for Medicare transition and long-term care options
  • Setting up your beneficiaries for financial independence after you’ve passed on

While thorough financial planning pre-retirement can help mitigate some of these risks, the only way to truly weather the storm and come out on top is to continue actively planning and managing your finances as you enjoy retirement. Doing so can allow you to continue enjoying your golden years and rest easy knowing you’re covered. With a knowledgeable financial advisor on your side, retirement planning can be less daunting and might even result in unexpected gains.

Based in Flemington, NJ, Rand Financial Planning specializes in helping clients (before and after retirement) across the United States plan for a stable retirement through customized, tax-efficient retirement planning. Schedule a 20-minute introductory call, or contact me at 908-895-2406 or marge@randfinancialplanning.com to see if I’m the right fit to help you on your financial journey.

About Marge

Marjorie Rand is founder and financial advisor at Rand Financial Planning, a comprehensive, fee-only, fiduciary financial planning firm based in Flemington, New Jersey. Marge specializes in helping her clients plan for a secure retirement and navigate life’s many transitions through customized, tax-efficient retirement planning. She is passionate about empowering her clients to make the best financial decisions for their lives and being by their side no matter what life throws at them. Marjorie spent many years as a CPA, specializing in estates, before founding Rand Financial Planning so she could be a go-to source for all her clients’ financial needs and help them avoid costly mistakes. She has a bachelor’s degree in accounting from Rutgers University and a Master of Science in Taxation from Fairleigh Dickinson University, along with the Retirement Income Certified Professional® (RICP®) and CERTIFIED FINANCIAL PLANNER™ certifications. When she’s not working, Marge enjoys boating, horseback riding, traveling, and hiking with her husband and her dog, Rangeley. To learn more about Marjorie, connect with her on LinkedIn.

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