Most investors spend the majority of their lives attempting to accumulate investable assets based upon the priorities and goals they’ve set for their family. Among the many priorities are establishing an Emergency Fund for liquidity, Saving for College (529 Plans), Retirement Planning, Health Care Planning and possibly even purchasing a Vacation Home. They realize they are in the accumulation phase of their lives and they have time on their side to ride out the volatility that is often present in the Stock Market.
As investors age into their 40’s & 50’s, they may begin to achieve some of their goals (such as paying for College Tuition, etc.) & they now realize their time horizon has now shortened in terms of reaching some of their other goals. While they have accumulated and earmarked some funds towards Retirement, Health Care Expenses or a Vacation Home, they begin to wonder if they will have enough money to last throughout their entire retirement period. And if that wasn’t enough to think about, many retirees don’t realize that up to 85% of their social security benefits (including the amount withheld for Medicare premiums) are subject to income tax. There are usually no taxes withheld from their social security check which amounts to an added expense in retirement that many simply don’t plan for. These concerns are indeed valid ones, concerns that need to be acted upon. Unless you are a financial or tax professional, you may not have the tools or the expertise to assess whether or not your money will last as long as you do.
Our combined expertise as Wealth Management Advisors and Tax Professionals means that we’re faced with these questions on a daily basis. It is of paramount importance that investors in this situation develop a written Financial and Tax Plan so that you can establish concrete strategies that can be followed to attempt to keep you on track to realizing your family’s financial goals. This is an essential first step. Prior to deciding to actually retire, you will need to reassess your financial position and develop a customized Income Plan that will take the Investable Assets you’ve accumulated throughout your lifetime and convert them into income. This is critical as your goal should be to preserve your capital while maximizing your income and minimizing your income taxes. These are essential components of the Income Plan you should be developing. Finally, when looking to develop lifetime income, it may be wise to consult with both a Financial and a Tax Professional, as they have access to certain select products that individual investors do not have access to. And with interest rates at or near all-time lows, it has become extremely challenging to develop enough income to last throughout your entire retirement period. As this decision will affect the rest of your life, it is essential that you attempt to become more knowledgeable about the strategies and products that may provide you with the best chance for success.
Jim Cassa, CPA, PPC Ted Byer, CPA, PFS, CFP® Leon Grassi
President Partner Director of Marketing
Cassa Wealth Management, P.C. Smolin Wealth Advisors, LLC Smolin Lupin & Co., PA
Important Disclosures
Smolin Wealth Advisors, LLC is a Registered Investment Advisor (RIA) with the state of New Jersey. They are an affiliate of Smolin, Lupin & Co., PA, who provides Accounting, Tax and Advisory Services.
Cassa Wealth Management is an Independent Wealth Management firm that provides Financial Planning & Wealth Management Services for both Individual & Corporate clients through LPL Financial.
Smolin Wealth Advisors, LLC, Smolin Lupin & Co., PA, Cassa Wealth Management, P.C., and LPL Financial are all separate entities.
James T. Cassa, CPA, PPC is President of Cassa Wealth Management, P.C. Jim is affiliated with LPL Financial, the nation’s #1 Independent Broker/Dealer*.
* As reported by Financial Planning magazine, June 1996-2015, based on total revenue.
Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.