Created: September 19, 2021
Modified: September 9, 2022

Episode 51: How Do I Retire?

Thank you for joining us for episode 51 of our Money Wisdom Question Series. Today’s question is, “How Do I Retire?”

Making the Transition into Retirement

We spend all these years working and saving for retirement and accumulating income. Hopefully, you grow more money as time passes. Every year you get closer to your ideal retirement date, whatever it is you’ve planned for. Of course, different people want different things. Eventually, the question becomes, “How do I take all this money that I’ve saved and turn it into income?” Sometimes people think that’s a silly question, but it’s really not.

How Taxes Can Affect Your Retirement

How many of you think taxes are going down? No one, I’m guessing. We have to anticipate that taxes are going to continue to increase. Are you doing things in the early years of retirement in regards to where you’re drawing money from that you might regret later on? Some things to consider:

  • Should you do a Roth conversion?
  • When should you draw your Social Security?

As of right now, the Required Minimum Distribution is at age 72. So, if you’ve got this chunk of money in your IRA and your 401(k) that’s growing, that’s great. You certainly want to grow your money. But is that the best way for your money to be growing? Keep in mind, that every dollar you make in your IRA increases your future tax liability. Maybe that’s the money you should be spending sooner. Or maybe you should consider a ROTH conversion.

Retirement Planning is Income Planning

We start the conversation of retirement with, “What have you saved? What do you need that money to do? What is your income going to be?” Your retirement planning is income planning and for a lot of folks, assuming you’re fully retired, that’s Social Security. Maybe you have a pension. For a lot of people, the biggest source of income is what can you draw off of your investments. We encourage you to sit down with a professional and start to talk about these things:

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  • How much are we going to spend in retirement each month?
  • What do we want our retirement to be like?
  • Do we want to travel during retirement?
  • Would we want to stay home once we retire, or relocate?
  • Should we give money to our kids, or do we want to spend it all during our retirement years?

Important Conversations to Have Before Retirement

These are the important conversations that you have to be having before retirement so that when you get to retirement. You can live how you want to live, because you certainly didn’t save this money all these years as a result of being frugal and making good financial decisions to make it to retirement and be afraid of spending your money.

  • Sandy and Thomas C.
    Sandy & Thomas C. are clients of Johnson Brunetti and received no compensation for their statement.

    “We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”

  • Robert G.
    Robert G. is a client of Johnson Brunetti and received no compensation for his statement.

    “We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”

  • Lisa D.
    Lisa D. is a client of Johnson Brunetti and received no compensation for her statement.

    “Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”

  • Ken D.
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    “I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “

  • Jeanne P.
    Jeanne P. is a client of Johnson Brunetti and received no compensation for her statement.

    “Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”

  • Anonymous
    This testimonial was provided by a client of Johnson Brunetti and received no compensation for their statement.

    “I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”

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