Many milestones in life are “firsts”—births, graduations, jobs, and so forth. Retirement is a first as well, one that people spend their entire careers building up to.

Oftentimes, an approach to retirement planning is viewed as a simple equation involving a nest egg, time horizon, and rate of return. While these are important variables to the success of a retirement plan, we take a much more in-depth approach.

CCM advisors utilize their wisdom and experience to help decipher the complexities of your situation, then unlock the opportunities associated with it to design a customized retirement strategy. In our retirement planning process, we focus on optimizing your future financial journey. The key to unlocking opportunities for optimization isn’t just asking the right questions, but understanding where to look to ask those questions, which typically fall into three categories:

Retirement Plan “Exit” Decisions

When it comes time to flip on the retirement switch, there are many decisions that need to be made. Do I take a pension or lump sum? Do I stay in my 401(k) or roll it over to an IRA? What do I do with my employer stock? Many of these decisions can only be made once and not changed once an election has been made. There are a variety of factors that may make your decision different compared your peers and co-workers. Examples include your spending levels, other assets, current vs. future marginal tax rates, and health situation.

Partnering with an advisor, especially in advance of these decisions, can help you navigate the nuances. Our team can review summary plan descriptions, consider tax implications, and evaluate investment options. We utilize a variety of sophisticated modeling tools to compare these options as well as understand the nonfinancial motivations behind some of these decisions, such as the amount you desire to leave to heirs and your risk tolerance levels.

Retirement Withdrawal Strategies

Most investors have a savings mindset during their working years, as their strategy is to simply save as much as possible into their 401(k)s, Roths, and brokerage accounts. It is easy to save for the sake of saving, but more agonizing when deciding where to take withdrawals. When it comes to retirement “income,” there are wide-ranging tax implications, depending on the account types. By looking at a longer time horizon, an advisor can design an optimal retirement withdrawal strategy aimed at minimizing taxes over the long run by distributing from the right accounts AND the right underlying investments. After all, it is not about how much money you make, but how much money you keep!

Social Security Timing

When one paycheck stops from an employer, it is easy to turn on another from the Social Security Administration. However, the decision to start Social Security for one or both spouses can leave money on the table over the long run and impact your retirement account withdrawal and tax strategy. Working with an advisor, especially one with tools to optimize this timing and break-even age, can make sure both spouses begin taking Social Security at the optimal time to maximize spousal and lifetime benefits.

Many of our clients are experts in their professional fields. They may be doctors, dentists, pilots, or business executives. They are also grandparents, community volunteers, and mentors. Their experience allows them to guide decisions for the people they serve. For instance, to the untrained eye, a medical chart is a series of notes, numbers, and percentages, but to a doctor it tells a deeper story to shape a diagnosis or treatment plan. A flight plan is just a route in the sky to a passenger, but to a pilot it is a calculated decision based on weather, time, and air traffic.

Similarly, while at first glance your retirement plan may simply look like a nest egg, time horizon, and rate of return, to our advisors it is a complex symphony that requires a careful balance of interlinked strategies and decisions.

If you have ever asked yourself what the best course of action might be on any of the issues described here, it may be time to lean on the experience of Carlson Capital Management. We have helped many families navigate through these decisions and welcome the opportunity to do so for you as well.