You’re Retired . . . Now What?

You’re Retired . . . Now What?

You worked hard for decades, earning an income and stashing away a portion for retirement.  After thorough deliberation with your financial advisor, you decide that you can finally retire!

Many believe their financial advisor’s primary purpose exists while they accumulate money for retirement. Since financial advisors act as a coach through the ups and downs of the market, it is certainly important to have a trusted advisor while you accumulate money for retirement! However, due to the added complexities that retirement brings, retirement could be the most important time for financial advice, especially considering income and expense planning, long-term care planning, and legacy planning.

During our working years, income and expenses are generally predictable. We usually know what our paycheck is each period, and our expenses are generally similar from month to month. Conversely, income and expense planning is often more complex during retirement. Retirement income can be generated from a variety of sources, including part-time jobs, social security, annuities, and interest/dividends from investments. Furthermore, income from some of the aforementioned categories can vary from year to year depending on personal circumstances and market conditions. Although many expenses are still predictable during retirement, some are not.  One year, you might have grandiose plans for a trip to Europe, while another year brings a medical complication that requires an expensive surgery to remedy. Given the additional nuances, having a trusted advisor during retirement is extremely important because they can help you pull income from the most efficient sources and manage the cost of your dream retirement.

During retirement, the risk of long-term care increases in prominence. Long-term care occurs when one has a cognitive impairment or if he/she could not perform at least two “Activities of Daily Living.” The Activities of Daily Living (ADLs) are bathing, dressing, toileting, transferring, continence, and feeding. SingleCare estimates that 70% of retirees will face a situation where long-term care will be needed. Depending on the level of service needed and where you live, long-term care costs could be well over $10,000 per month.  Sometimes, a long-term care event could last for years. Obviously, facing a long-term care event could be devasting to your financial situation.  There are many ways to prepare for these long-term care events. During retirement, it is important to speak with your financial advisor to ensure that your financial picture will be secure if you or a loved one needed long-term care.

Retirement is often called the “Distribution Phase” of an individual’s financial life cycle. Not only does the distribution include living off your accumulated assets, but it also involves leaving behind a legacy. Leaving this legacy could involve lifetime gifts, such as gifts to individuals or charity. Leaving a legacy typically also involves managing one’s estate. Sadly, the event of your death often is the biggest tax bill that your assets will ever face. Income Taxes, Inheritance Taxes, and Estate/Gift Taxes present many pitfalls. It is crucial to navigate this tax minefield with a carefully crafted legacy strategy to minimize damage from avoidable taxes. When considering how to leave a legacy (during life and death) speaking with a trusted advisor is extremely important.

Whether you are mapping cashflow, planning for long-term care, or preparing to leave a lasting legacy, retirement is prime time for financial advice. At Ambassador Advisors, we look forward to helping you through this next phase of life.

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.
This material is for informational purposes only. Neither APFS nor its Representatives provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions. Information has been obtained from sources believed to be reliable and are subject to change without notification. The information presented is provided for informational purposes only and not to be construed as a recommendation or solicitation. Investors must make their own determination as to the appropriateness of an investment or strategy based on their specific investment objectives, financial status and risk tolerance. Past performance is not an indication of future results. Investments involve risk and the possible loss of principal.

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