Navigating the complexities of retirement planning can be overwhelming, especially when maximizing your retirement income during periods of persistent price increases and economic uncertainty. Engaging the services of a Greenville financial fiduciary advisor can be a game-changer, especially if you have been managing your own money or are planning to change financial advisors.  

In this blog, we’ll discuss the following topics that impact the optimization of your retirement income:

• Understanding the Role of a Financial Fiduciary Advisor
• Assessing Your Retirement Needs and Goals
• Creating a Comprehensive Retirement Plan
• Optimizing Social Security Benefits
• Tax Efficiency and Retirement Income
• Ongoing Monitoring and Adjustments

Understanding the Role of a Financial Fiduciary Advisor

A financial fiduciary advisor is a professional with a legal and ethical duty to always act in the best interests of their clients. This is the highest ethical standard in the financial service industry.  Fiduciaries must always avoid potential conflicts of interest and put your financial well-being ahead of their own. 

The role of the financial fiduciary advisor is to help you plan for your retirement years by providing a customized plan for your circumstances, needs, and goals. 

Assessing Your Retirement Needs and Goals

One of the most critical steps in retirement planning is defining your goals and understanding your income requirements once you retire from your current job or sell your business. 

A trusted Greenville fiduciary advisor works closely with you to determine your desired retirement lifestyle. For instance, do you plan to travel extensively, or are you inclined to live a quiet, stay-at-home life? Your answers to these questions can majorly impact your retirement lifestyle and financial security late in life. 

Creating a Comprehensive Retirement Plan

A fiduciary financial advisor in Greenville, SC, should consider all aspects of your personal and lifestyle needs. This detailed approach allows professionals to build a retirement plan that maximizes your income while aligning a sustainable financial lifestyle with your assets.

To start the planning process, a Greenville CERTIFIED FINANCIAL PLANNER™ (CFP®) will review your current income, savings, investments, expenses, debts, taxes, and risk tolerance. They will also gather information about your future goals, needs, priorities, and financial expectations upon retirement.

Once the analysis is complete, the financial planner will develop a comprehensive retirement plan. This plan may include a budgeting strategy, a savings plan, investment recommendations, and strategies for tax planning, risk management, and estate planning. The plan will also factor in potential scenarios like economic changes, inflation, and longer-than-expected life expectancies.

Optimizing Social Security Benefits

Deciding when to start claiming social security benefits is a complex decision with long-term consequences. Your fiduciary advisor can guide you through various claiming strategies and timing considerations, ensuring you make informed decisions that optimize your social security benefits.

Optimization of when to start taking social security benefits is crucial for several reasons. First, it directly influences your income stream during retirement. You can start claiming Social Security benefits anytime from age 62 to 70. 

However, the longer you wait, the larger your monthly benefit will be. Therefore, delaying Social Security may be beneficial if you can wait. Also, your decision should consider your overall health and life expectancy. If you anticipate a longer lifespan, delaying benefits typically provides a higher total payout.

Second, the timing of when you start taking social security benefits can significantly impact your tax situation. Social Security benefits can be subject to federal income tax, depending on your income level. If your total income, including Social Security, falls within certain thresholds, up to 85% of your benefits can be taxable. Starting Social Security benefits while you're still working or have other substantial income sources could inadvertently push you into a higher tax bracket, increasing your tax liability.

Lastly, remember that your Social Security benefits can serve as a strategy to offset the need to withdraw from your retirement savings, thereby preserving these assets for later in life. This could reduce the taxable income you must draw from retirement accounts, potentially keeping you in a lower tax bracket. Therefore, considering the interaction between Social Security benefits, other income, and taxes is critical to retirement planning.

Tax Efficiency and Retirement Income

Creating a tax-efficient retirement plan is pivotal to any comprehensive retirement strategy. It becomes increasingly important when you expect to be in a higher tax bracket in your early retirement years. 

Proper allocation of assets across various types of accounts can ensure you get the most from your investments. This strategy involves understanding the tax implications of different types of accounts, such as Traditional and Roth IRAs, 401(k)s, taxable investment accounts, and other forms of savings, each of which has unique tax implications for contributions, market appreciation, and withdrawals.

Creating a withdrawal strategy for retirement that aligns with your tax situation is a key aspect of this plan. Each type of account offers different tax benefits and penalties; thus, determining the order of withdrawals from these accounts can significantly impact the total tax you pay during your retirement years. 

For instance, it could be beneficial to withdraw from taxable accounts first to allow tax-advantaged accounts like IRAs or 401(k)s to continue to grow tax-deferred or tax-free. Or, if you are in a high tax bracket, converting traditional IRA assets into a Roth IRA and paying taxes now to enjoy tax-free withdrawals later may be your best strategy. 

Balancing withdrawals to keep you in a lower tax bracket while meeting your income needs can add complexity, but it may be your best strategy.

Ongoing Monitoring and Adjustments

Retirement planning is not a one-time event. It requires ongoing monitoring and adjustments to respond to market conditions, changes in tax laws, and your current circumstances. A fiduciary financial advisor provides ongoing support, tracking progress, reassessing goals, and making necessary adjustments to align your current plan with your long-term financial security needs.

The Value of a Fiduciary Financial Advisor in Greenville, SC

Choosing a fiduciary advisor means selecting a partner committed to your financial well-being. At Global View Investment Advisors, we prioritize your interests and provide continuous support throughout your retirement journey. When working with the Global View team, you can rest assured that your retirement plan is designed with your best interests at heart.

As a fiduciary financial advisory firm, we offer comprehensive retirement planning solutions to maximize your retirement income. Our experienced guidance can help you navigate retirement, create a tailored retirement plan, optimize social security benefits, utilize tax-efficient strategies, and provide ongoing support. If you're in Greenville, SC, the path to a comfortable retirement may be just a consultation away.