203-634-7549 info@lakefsllc.com

Often, my clients ask me about retirement. They want to know: How will taxes impact my retirement? How much do I need to retire? And most importantly—WHEN can I retire?

When clients ask me these questions, I have even more questions in return.

Optimizing taxes is certainly a critical component of retirement.  In order to give the right advice, I need to get a sense of where you are today, and where you want to be in the future. I can answer the quantitative questions, but in order to help you plan for a complex goal like retirement, we need to dive into some further questions together…questions that can’t be solved by an equation!


Where do you stand today?

How far are you on your retirement planning journey? Perhaps you are new to investing–a Roth IRA may be a perfect place to start, depending on your income level. If you are farther along in your career, you may have many accounts–old retirement plans from previous jobs, and maybe a taxable brokerage account. You may need help consolidating your accounts for simplicity and a more coordinated approach. There are opportunities to optimize your tax strategy no matter where you are in your journey, but it’s important for your CPA to know the details.

What does retirement mean to you?

The beauty of retirement is that you can spend your time as you please. For you, does this mean an end to all paid work? Or perhaps the start of an encore career part-time?

Your sources of retirement income (investments, earned income from a job, Social Security, pensions, annuities, etc.) and your income tax situation will impact your overall strategy for retirement.

What are your financial goals and challenges?

This is a broad question, but an important one to think about along with questions about retirement lifestyle. For example, if you plan on buying a vacation property in retirement, or downsizing to a more manageable home, there are certainly tax implications to think about.  Saving for financial goals impacts the income you need in retirement, and the strategy recommended to achieve those goals.

Do you have kids or grandkids?

This will likely impact your choice of where to live. If you are not local to family, then perhaps your retirement budget needs to incorporate more travel. As kids move out of the nest, you may consider downsizing. If you are considering moving to a lower income tax state, remember that there may be other tax or cost of living differences that you should take into account before taking the plunge.

Do you have any health issues that may impact your retirement?

Of course, you do not have to disclose your health history to your CPA—but your personal health and the history of longevity in your family will impact your retirement strategy. Lifespans have increased to the point where retirement income may need to last 30 years or more!

Your expected longevity (or lack thereof) will also impact the best Social Security claiming strategy for your situation, choice of Medicare and Medigap plans, and Required Minimum Distribution strategy from tax-advantaged investment accounts.

Let us handle the numbers, while you focus on creating a day-to-day life you don’t need to retire from! Give some thought about what you want your retirement to look like in terms of long-term goals and day to day life. Let’s make a plan to achieve it. Call Lake Financial Services today at 203-634-7549 or contact us through our contact form and we’ll talk about how to make your retirement a tax-efficient one.