Miami Beach

Financial Planning for Retirement and your Golden Years

As a retiree, it is time to finally harvest the fruits of your labor and ride off into the sunset. Safety of principal and the orderly drawdown of income that are now all important. For your Golden Years, you are likely to have substantial 401(k), IRA, mutual fund, and investment accounts at your disposal.

Leaving a Legacy

Middle income and retired clients approach the ultimate financial planning junction of whether to maintain their current lifestyles, or to downsize and invest more of themselves into passion projects. Inflation and taxes are especially critical in setting retirement projections, with life expectancies now approaching 80 years of age.  

We do find that legions of snowbirds and empty nesters liquidate Rust Belt and California homesteads, in favor of moving into low-tax Sun Belt states. From here, extra cash can be directed towards traveling the world, philanthropy, or even setting up trust funds for extended family.  This is your legacy.

Cash Management and Insurance Coverage

For retirement, Onyx Investments advises clients to minimize committed expenses, in order to live comfortably and mitigate inflationary risks. We may call for you to pay off your primary residence mortgage in full, or sell the home and downsize into a smaller, city condominium before considering retirement.

After doing so, you will surely find an increase in discretionary dollars for enjoying a leisurely retirement. As a retiree, you are finally free to prioritize daily rounds of golf, resort travel, fine dining, and Broadway shows, without guilt. Our data gathering process will calculate free cash flow that may be reasonably spent.     

Intelligent cash management and proper insurance coverage interlock together as the real building blocks for your financial plan. Health and long-term care insurance will shield your nest egg away from skyrocketing medical bills, while life insurance is central to your estate plan.  

Estate planning is a family affair, and Onyx Investments is sensitive to the hidden challenges of generational wealth. High-net-worth clients covet a delicate balance between providing for heirs, while still installing a genuine appreciation for hard work through their future lineage.

Retirement Plan Distributions

The 401(k) / 403(b) to Traditional IRA plan rollover is a financial rite of passage for those transitioning out of the workforce and into retirement. The rollover allows for greater control over your retirement funds, while also sidestepping penalties and deferring income taxes until a later date.

Traditional IRAs feature similar rules to those of your old 401(k) and 403(b) plans, where withdrawals are taxed at ordinary income rates through retirement. Early IRA withdrawals made before age 59 ½ are subject to additional taxes.

At age 72, the IRS mandates that you begin taking required minimum distributions (RMDs) out of your Traditional IRA and paying taxes. Onyx Investments will help you to calculate IRA required minimum distributions, which are a function of your life expectancy, marriage status, and account balances.

Your Roth IRA accounts, however, are not subject to taxes and RMDs. Roth IRA funds have already been taxed, which makes these vehicles ideal for young professionals who are very much likely to eventually retire in higher tax brackets.

Financial Strategies for Retirees

Inflation risks can be particularly devastating for retirees living on a fixed income. The Bureau of Labor Statistics Consumer Price Index historically calculates the annual inflation rate at 3%. Seniors, of course, are very well aware of double-digit yearly inflation through the 1970s, early 80s, and post COVID-19 era. Alarmingly, we may all expect for price levels to double every ten to twenty years.

The ideal retiree portfolio will still be made up of a diverse mix of stocks, bonds, and money market securities. We invest to smooth out market volatility, while also preserving purchasing power. Onyx Investments will recommend a gradual shift towards bonds and money market security with time, and as you age like fine wine.