IMPORTANT DISCLOSURE INFORMATION
The following presentation by New England Capital Financial Advisors, LLC (“NECFA”) is intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from NECFA or any other investment professional of your choosing. Please see additional important disclosure at the end of this penetration. A copy of NECFA’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.newenglandcapital.com.
How To Make The Most Out Of Your Retirement Savings After You Retire
For many people, retirement is one of the biggest financial goals—and one of the biggest questions. Whether it’s just around the corner or still years away, the challenge remains the same: how do you turn the money you’ve saved into an income stream?
This is a significant financial and emotional shift. Transitioning from building wealth to drawing from it—especially without a regular paycheck—can be unsettling. It’s not just about having enough saved; it’s also about having a clear strategy for how and when to access what you’ve built.
As financial professionals, we can help you navigate this shift with strategies designed to provide clarity and confidence over time.
Here are a few key considerations we help you think through—and that we revisit periodically as circumstances change:
Social Security Isn’t Just About Timing—It’s About Integration
Most people know they can begin taking Social Security as early as 62 or wait until 70 for a higher benefit. However, what’s often overlooked is how Social Security fits into their broader income strategy.
For example, delaying benefits means you may rely more heavily on withdrawals early on. Conversely, claiming earlier may reduce your monthly benefit but could free up investment assets to remain untouched longer.
In many cases, Social Security works best when viewed not in isolation but in conjunction with your investment income and lifestyle.1
Which Accounts You Withdraw From—and When—Can Affect Your Taxes for Decades
Your retirement portfolio is typically divided into three broad categories based on its tax characteristics:2
- Taxable (e.g., brokerage accounts)
- Pre-tax (e.g., traditional IRAs, 401(k)s)
- Post-tax (e.g., Roth IRAs)
How you sequence withdrawals from these accounts can impact your current tax bracket, the amount of Social Security taxed, and even the premiums you pay for Medicare. One approach to consider is withdrawing from taxable accounts first, then pre-tax, and reserving post-tax accounts for later.
But there are nuances. For instance, taking smaller IRA withdrawals earlier in retirement may be beneficial—even before they’re required—if you’re temporarily in a lower tax bracket. This kind of “bracket management” can help smooth out taxes over time.
Before discussing specifics, we encourage you to consult your tax, legal, and accounting professionals for insights tailored to your situation.
Flexibility Can Help Manage Market Risk in the Early Years of Retirement
One concept we often discuss is “sequence risk”—the danger of retiring just before or during a market downturn. Taking withdrawals while your portfolio is temporarily down can hinder its ability to recover.2
We help manage this risk by incorporating flexibility into your strategy:
- Establishing short-term cash reserves
- Adjusting withdrawals if the market Drops
- Being thoughtful about discretionary spending in the early years of retirement
Having a strategy for responding to market volatility can alleviate stress and enhance long-term outcomes.3
RMDs—and Future Tax Liability—Can Be Approached Proactively
Required minimum distributions (RMDs) start at age 73. While they may seem like a distant concern, early preparation is wise. RMDs are taxed as ordinary income and can push some individuals into higher tax brackets, especially when other accounts are considered.4,5
We often model different withdrawal patterns to balance current income needs with future tax exposure, and in some cases, we explore Roth IRA conversions to manage taxable income later in retirement and eliminate RMDs altogether.3,6
Bottom Line: Retirement Income Isn’t One Decision—It’s a Strategy
Retirement income isn’t a single choice or a fixed formula—it’s an ongoing process. We’re here to help you approach retirement with confidence and a strategic mindset.
Source:
1. USAToday.com, March 20, 2025
2. SmartAsset.com, October 14, 2024
3. Fidelity.com, November 20, 2023
4. IRS.gov, March 2025
5. PlanAdviser.com, December 20, 2024
6. SmartAsset.com, March 2025
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by New England Capital Financial Advisors, LLC [“NECFA”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from NECFA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. NECFA is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the NECFA’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.newenglandcapital.com. Please Note: NECFA does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to NECFA’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a NECFA client, please contact NECFA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.