Sally sold seashells, down by the seashore. Before Sally was ready to retire, she came to McMullin, Stone & Associates. Will Stone provided her with an analysis of her retirement savings, her pension from Seashells Inc., her Social Security and some life insurance benefits she had received from the recent passing of her husband.
Because Sally was used to living at the beach, Will helped her create a reasonable beach-ready retirement plan. She’s not worried about a paycheck anymore.
Sally can now spend her days at the beach, showing her grandchildren how to find the best seashells for fun.
Will Stone: You do have to take out your required minimum distributions. Beyond that, there are three simple options. Spend it. Save it. Or give it away.
- Spend it: You make the call. Take your grandchildren on vacation to the beach? Get a new handbag. Buy a new car.
- Save it: You can take the money and put it in a non-retirement investment account. You can then reinvest the money, and it can stay there until you need it, maybe when you’re 105.
- Give it away: Many people don’t realize that they can take their minimum distribution and have it sent to a charity of their choice by the firm that holds their IRA. The charity benefits from the gift, and the client benefits by not having to pay taxes on the distribution. In order for this to work, the check has to be sent directly from your IRA to the charity—if it goes into your checking account, you’ll pay the taxes. You’ll want to make sure the organization qualifies as a 501c3 charity.
I want to be sure that I’m not a burden to my family as I get older. What should I do?
Will Stone: When most people ask that question, they are usually concerned about what will happen when they need long term care for something like dementia, stroke or a prolonged illness. What’s important to understand is what the financial impact of having care provided by someone other than a family member is, and if you have the money to pay for that. If you don’t, or if you don’t want your money used for that, then it’s a good idea to look at transferring that financial risk through long term care insurance, or other insurance products that provide money for long term care needs.
I am 65, and I’m still working. How will my Social Security, pension, IRA distributions and other accounts work together to provide me with the income I will need in my retirement?
Will Stone: The answer is based uniquely on the lifestyle you are likely to have, and the amounts of all of those things. We typically analyze the situation, and use Social Security and pension income as our starting point. The next steps are to figure out how much of your expenses are covered by that income, then determine the rate you’ll have to take out of your other assets to supplement your base income. We develop a plan to invest and manage the accounts so they can deliver the income when you need it.
If you are at or near retirement, there’s never been a better time to get a free consultation with us. At McMullin, Stone and Associates we have deep experience in helping our clients to manage their expectations and experience with retirement. We recognize that this is the first time you’ve made this transition, but we’ve walked through this with many women over the last 20 years. Call 770-471-6674 for an appointment.