Capitalist Investor

The 5 Critical Retirement Moves You Can’t Afford to Miss, Ep. 329

• Strategic Wealth Partners

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Retirement isn’t just about reaching the finish line—it’s about making sure your money lasts as long as you do. In this week’s episode of The Capitalist Investor, Tony and Derek break down five critical retirement moves that often get overlooked:

✅ Recheck your withdrawal strategy
 ✅ Lock in healthcare coverage costs
 ✅ Review and adjust your tax strategy
 ✅ Simplify and consolidate accounts
 ✅ Establish a realistic monthly spending plan. 

Plus, they wrap things up with their picks for this year’s British Open. 

If you’re in or approaching retirement, this episode covers real-life insights and strategies to help you stay on track. 

🔗 Have a question or show idea? Email us: info@connectA.com
 🎧 Subscribe to get new episodes every week. 

In today's capitalist investor, we are going to talk about Retirement isn't just about crossing the finish line. It's about making sure your money last as long as you do. So we are going to talk about the five efficient and critical moves. You don't want to overlook. so, Tarik, I'm going to kick off the, capital investor today with the five efficient and critical moves that people need to just be aware of. You know, maybe you're already doing it, but maybe you can fine tune some of that stuff. That and I'll say retirees, but it's for everybody pre retirees, retirees. Someone's about to enter retirement, things like that. Or maybe you're just doing some of these things that you're still in your accumulation phase. So good to know what to expect. What's coming up I agree I agree. So, first things first is recheck your withdrawal strategy. You know, they always use the rule of thumb. 4% of your account value is around the number you should be spending. If you're higher than that, you will then possibly run out of money. You know, like there's statistics, you know, between 3 and 5%. So the 4% rule, but you also need to consider, higher living expenses. Right. You know, so but you know, usually inflation and the stock market run in tandem as inflation goes up, so does the stock market, which that has been historically. So that's one thing. Factor and possible Social Security benefit. You know depletion. We've talked about this in the past where the, the the Social Security, you know, trust fund is supposed to run out of money in 2033. We need to understand that that trust fund makes up 23% of distributions to Social Security. So when that runs out of money, what happens. Everyone's going to 23% pay cut. We're going to pay more in taxes I don't know. And then also we need to consider dynamic withdrawal strategies. So what does that mean. Adjusting spending based on market performance. So what does that mean is you don't want to sell low. The the most detrimental thing to a portfolio in retirement is creating an income. When the market is in a in a trough, when the market's down in a bear market down ten, 20%, locking in those losses is a big problem. So what do you do in those in those situations? That's why I having you know, we've talked about it before. If you want to be ultra aggressive, you want to get outside of that 6040 or 7030 model and you want to be more aggressive with equities over fixed income, you should still think about having about three years of of of your spending income in some type of fixed income component, whether it's bonds or money market or a CD or something like that, so that if the market does dip, you have you're giving the market time to rebound so that that's, those are some ideas if you want to add anything to that. D no, but obviously that, that, that's number one for a reason that, that is a huge deal to, you know, make sure that your withdrawal strategy matches your, obviously your savings and your lifestyle. Yeah, I, I actually had a case example, I was talking with the client the other day and, and this person was having some life up routines, like selling a house in one state, moving across the country, changing jobs. There was, a time where there was no income. So she had to dip into different accounts. And I've been in contact with this person about a slew of things. This was during tax season, like everything. And then, you know, we're sometime in the middle of summer. So, like, me and I have all this money. Tony, where is it coming from? And I'm like, your accounts. Are you are you full? Are you good now? You know, like I was. It needs to be an open dialog with with your with your advisor because I don't have access to your checking account. I don't have access. I don't know what you're doing. You bought a house. Maybe you're still spending stuff on furniture or carpet and I don't know, right? Like open communication is always good because that your withdrawal strategy is a strategy and and taxes come into play. So understanding what your income is from primary job, a secondary job, social security, pensions, all this stuff. Open communication with your advisor is actually the actually the biggest thing so that we can do things efficient. Yep. Absolutely. So all right, point number two here, locking in health care coverage. You know, I think this is a great one because, you know, honestly, if you're just, you know, an average person out there thinking about retirement, health care coverage might, might not even pop into your mind. But but is obviously, a huge deal as it's extremely expensive these days. And, you know, whether it's a medical expense or any other expense that, that, that you have in retirement, you have to be able to make sure you're planning for the proper amount, in your retirement plan. Yeah. I mean, it's definitely like the pre 65 cost in the post. 65 cost when you retire is something you need to take into consideration when you when you pull the, you know, pull the rip cord and actually retire something that needs to be addressed because it we all know health care is expensive, especially when you're doing it on your own. Yeah for sure. One other thing is, is like if you're eligible to do it, one of the great things for retirement is to fund an HSA while you're working. Now, you need you need to have a plan that is, you know, a health, health savings plan, an HSA, eligible plan. Yep. Right. It's not that traditional health insurance. It's the the low deductible, you know, put the money in the HSA because it acts like a Roth IRA, for health care cost. Yeah, for sure. And, you know, I think, you know, it just a note. You know, it's, maybe a little bit, too nerdy, but, you know, we, we inflate our health care costs a little more than actual inflation. Yep. Just because that's what has happened historically has actually been, a lot more than a little more. Yeah. So we thought we were aggressive and we were in that in some cases. So, I mean, I get to see our benefits every year for our, like, just our health plan for our employees and stuff. And I mean, it's almost feels like there's never, a, not a double digit increase every year. It's crazy. Yeah. All right. What's the next one? D all right. Review and adjust tax strategy. And I think this is, a very good one to talk about since the, the big beautiful Bill or whatever they're calling it. Because we've been we've been talking a long time about potential increases in taxes. And it looks like, you know, that is not going to happen, for the foreseeable future. Yeah. Which is a great thing. But that doesn't mean that the strategies that that we've been looking at and implementing over the, you know, the past ten plus years, don't still apply. So, you know, Roth conversions, I would say typically make sense between like, you know, if you retire at, say, 65, 66 and your, required minimum distribution age of 73, that that is typically the prime time for Roth conversions. Because you're usually in a little bit lower tax bracket. So, you know, the, the, you have to make those calculations every year. I think that's kind of the point I want to make. You know, it's, income fluctuates, right? Some people have non-qualified accounts. There's interest in there. The fluctuates. Maybe there's long term capital gains and some years and some not. But, you know, make that calculation every year, see if it makes sense. And I always tell, tell people that a Roth conversion is also kind of prepaying taxes for the next generation. Right? So it's kind of a mini estate plan as well, because they won't have to pay taxes on that. Yep. So legacy tools. So yeah, I find it, you know, if you're working it's usually not the best time to do a Roth conversion. But you can make Roth contributions something that you should, you know, take in consideration if you don't have any Roth money, you will be leaving some, you know, tax deductibility on the table. So you have to really think about where you're going to work when you're working, what tax bracket are you in and when you retire, what tax bracket are you going to be in. Yeah. Typically people are in the same or lower tax bracket. Usually you're not going to be in a higher one. So you know, getting the deductibility upfront while you're working in your highest earning years makes the most sense. Typically, and then doing the conversions when you retire, you know, come in paying the tax lower get the. So there's this balance I always have a discussion with clients on. But it's also kind of a feel thing too. It's like how do you feel about taxes tax free money. Because there's there's pros and cons to traditional contributions and, and you know, tax free Roth contributions. Don't forget about RMDs. So here's, here's the one thing. So like the age is 73, if you're over 73 now you got to start worrying about RMDs. That's why doing conversions are a big deal, because you don't pay RMDs on Roth IRAs. But the one conversation I am having quite a bit is when, the next generation inherits an IRA from a, you know, a deceased loved one, you know, or beneficiary and things like that. The new rules today is that you got to liquidate the account within ten years. And the conversations I typically start having with, with clients that are in this situation is we should really consider looking at it now because, I think you want to chunk out the distribution. If you wait all ten years like it's it could be a lot of money and shove you into multiple tax brackets and not be efficient. Again, it it's situational. But what I do find is like, hey, we got ten years. Like we should take little chunk. So, like, you don't get a huge lick. You're not forced to do like a liquidation in of a huge tax bill. In the, in the last years. Now, if it's a Roth IRA, let it cook. Yep. Right. And you are going to pay taxes on the distribution anyway. And then, charitable giving. One thing that I'm starting to see very popular are qualified charitable deductions. Q CDs, allows people that are age 70.5 or older to make tax free charitable contributions from tax deferred accounts, traditional inherited SEPs, and active simple IRAs. So you get to take the money out, give it to your charity and not pay taxes on that distribution. And it counts towards RMDs if you're 73 years old. Yep. So that's a good one. I've been doing lots of those lately. So, you know, even if, you know, you're just use that for your, you know, like your, weekly church contribution, you can give it to them, give and give it to the church all at once. Or you can even do it over time if you wanted to. But yeah, if your, your, your RMD age, definitely worth it to take a look at making your own charitable donations. Right? Right from the account. Yep. The other thing would just big beautiful bill, as we mentioned before, it, you know, like, I've had a couple of clients like, hey, Social Security that's done. It's in the bill somewhere. Does it affect me? Honestly, if you're not over age 65, it does not affect you. There's like so many different things where age 65 is the number, the age that, you know, things that have been rolled out, is will take an effect for those people. If you're under it doesn't really affect you as much. So, what's the next one day? Number four is simplify and consolidate accounts. Love it. Love it. Yeah. It's, look, you know, life gets in the way, right? You know, people are not thinking about things like this. Kind of like like we are on on a daily basis. You might have a, you know, job you worked out for, you know, six months and, and have a couple thousand dollars in, you know, an IRA account. Important to to get all that stuff together as soon as you can. I think it's better from a portfolio construction standpoint as well. Yep. It's easier for beneficiaries, right? You don't have to make sure all your beneficiaries are are lined up across all accounts. And, another thing, investment wise, you know, basically, a lot of people for, for whatever reason, seem to leave their accounts behind in their 401 K's, you know, at work, even after they retire some time. It is essential to to roll that money out of your 401 K's with, you know, usually. Okay, but limited investment choices to get that into an IRA. So you can start getting more specific with those investments for, you know, really everything that we just talked about, but specifically the income strategy. Yep. Consolidation love it reduces fees, reduces confusion, and will add sophistication to a portfolio. It's easier to have a more sophisticated strategy when there's just more money in the account. Right? Right. You can if you want to own 50 stocks, it's hard to do that with ten grand. But you know, if you got like 100 grand or 150 grand in one account, it's easier to do that, right? Right. I love the beneficiary things. The biggest thing I'll add to that is if you got an IRA, a tax deferred account, name, a human being for primary and contingent. Yeah, I know some people have fancy trusts out there, and and maybe they're necessary, you know, spendthrift trust things. You don't trust your kid with 20 bucks, let alone 200 grand, you know, and they show up, you know, you pass away and they own three Ferraris. Yeah. Like what happened? You know, like, there's different situations, but at the ultimately, naming a human being is the best way to accomplish the beneficiary side of things. So. Yeah. All right. What's the last one? Last but not least, establish a monthly spending plan. And hey look, you know, this goes if you, you know, have, you know, 500,000 saved or you have, you know, 50 million saved. Well, maybe not as much if you have 50 million, but you still you definitely need to have a very good and solid idea of what you're spending every month, especially when it comes to financial planning. You know, you shift from, you know, saving your whole life into spending when when you're in retirement and understanding how much you need and how much, you know, it's going to take to fund your lifestyle is really one of the most essential first steps to to coming up with a retirement plan. Yeah, you really have to. The last thing that you want to do is come up with a plan that says you're spending 5000 a month, but you're actually spending 7500 a month, right? Detrimental to build it. I'm now providing wrong recommendations. Exactly. But, and, you know, if anyone, any client that has a plan with us learns very quickly, that having a budget is very important, and overestimating that budget, you know, like you said, like, don't tell me five grand when it's 75. Actually tell me eight. Like, let's let's go over and build around that. Right. So it's so it's it's such an important number. It's actually the most important number in a financial plan. Absolutely. All right. So you know those are the five things that come to mind immediately. I hope this help I, you know, let us know. Would you add anything, you know, in the comment section? Let us know if you would add anything. Did this help? And, you know, for more things like this, you know, subscribe, subscribe. Because we talk about this retirement planning stuff all the time, but we also talk about fun things like the US open, I'm sorry, The Open Championship over in Europe this weekend. So Derek and I are avid golfers. And we like to, on the big majors. Just give some quick, some quick hitters and, people we like and, we think has a chance to win this thing. You know, I've, I've not I've not been doing too well this year. I'm the picks. I mean, well, JJ spawn wins the one. It's like, who called that one? Nobody. That was, that was a wild finish to the US open. And then the rain there. That was a good time. You know, obviously Scottie Scheffler and Rory are up there, at the top. You know, I'm going to pick Bryson just because he hasn't, he hasn't been up there in a while. And, you know, this is us. I'm sorry. This is the open. So links style golf. It, you know, he he can hit it a long way, and he. Yeah. And he can. He's super, super inventive and amazing around the greens. So I would think it would set up well for him. I'll throw a couple more names out there for you. Adam Scott, I think, always plays well at the the British Open. And, Justin Thomas, I don't know why, but I think he's going to have a good week. Okay, I like it. When I take a look at this, obviously look at the live guys, because they're kind of off the radar. Obviously you've got John Ramis in great form. I was looking at, like, shots gain over the last two months doing very well. The other thing is, is like, you're in Europe and the weather is, a factor. So good weather players are Rory and, Shane Lowry. Yeah. So keep those guys in mind. I think Lowry won a few years ago in really terrible weather Valley. So he's he's got some experience in playing in bad weather and it could pop up at any time. I don't know about Rory, man. Like, ever since they confiscated his driver, he hasn't been the same guy. Grumpy and grumpy. Oh, man. He is not happy, he's not playing well, and he can't get off like something. I don't know, man. They took his magic stick away and, whatever. But the other the other thing is, is that, you know, this is a Link Styles course, so it's just, you know, you could spray it into another fairway and get away with it. So some of the players that do well in link style courses are Jordan Spieth and Bruce Koepka. Koepka always shows up in the majors. He's really good shot. He's got two shots gained. I believe like per round, in in a link style course. So, I think one of my favorites, I'm going to, I'm going to go with like Tyrrell Hatton I think he plays well. He's, he's, he does well also in in link style. But he's been playing well. He's been chomping at the bit to like get over the hump and win something significant. And I do like Bruce Koepka and he's like 60 to 1. That's good odds. Jason Day's also great at, link style courses, 90 to 1. So I'm going to sprinkle. Yeah. Got a couple schillings across. Some of these guys that are 90 and 60 to 1. Yeah, absolutely. Like, Cam Smith might be a nice long shot. Oh my gosh. Oh, you go about to say that I know. No, but he but he wasn't he's not even on the list like like the top 50 people. Like I didn't see his name. But what's his odds like 100 to 1. There's in the next one. Next page. There's a bunch bunch more names. 125 to 1. But he he's a, former winner. Yeah. One of the greatest rounds of golf I've ever watched. When he won. Won the open. Just a absolutely ridiculous round to beat Rory. His putting on on super undulated type of greens and long, huge greens is some of the best in the world. So. All right, well, good stuff. Any, last minute picks there? I'm not I mean, I'm, I, I like, I like Hatton, I like Koepka, on top. I mean, you mentioned DeChambeau. I just feel like he just stuck when he gets into these majors. I'm not go. Jon Rahm yeah I like Rahm. That's my that's my like favorite pick right. You know as a favorite. But like some of those other guys like Hatton and Lowry and and probably kept going I'm going to sprinkle some money on those guys. Yeah. All right. Well good stuff. Well, thanks everyone for joining us this week. If you have any questions, comments, show ideas like Tony mentioned. Hit us up at info at connect A.com, and we'll talk to you next week. The opinions expressed in the podcast. Are for general informational purposes only, and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs. It.