Download Is Your Portfolio in Sync with Your Retirement Withdrawal Strategy?

Is Your Portfolio in Sync with Your
Retirement Withdrawal Strategy?
Jeffrey Went, CFP®, Vice President/Financial Planner
When planning your retirement withdrawal strategy, it is very important to make sure the critical
components of your portfolio are in sync. These components include your tax bracket, the tax
treatment of your assets, and the specific goals for which assets are earmarked.
A basic approach to withdrawing assets would include liquidating bank accounts, non-qualified
brokerage accounts, non-qualified variable annuities, IRA accounts, and Roth IRA accounts, in
that order.
However, this general rule is usually outperformed by a tailored approach that simply requires a
bit more attention paid to the order of your withdrawals. Here are a few examples of how your
portfolio can be synced to specific withdrawal strategies.
About
Jeff Went
Vice President/Senior Estate Planner
Jeffrey Went is a Financial
Planner who serves in Janney’s
Planning Solutions Group, part
of the Firm’s Wealth Planning
Department, from Garden City,
New York. His responsibilities
include the completion of
financial plans, as well as
working closely with Janney’s
Financial Advisors on strategies
to best meet the planning needs
of their clients. He joined the
Department in 2004.
Mr. Went is currently working
toward his Juris Doctor (JD) at
St. John University, Queens, NY
campus and expects to graduate
in May, 2017. He received his
BBA degree in Banking and
Finance from Hofstra University in
2004 and later obtained his CFP®
through the American College in
Bryn Mawr, PA in 2008.
Syncing Withdrawals to Changes in Your Tax Rate
Will you be in a lower tax bracket once you retire?
Syncing your portfolio to your withdrawal strategy might require determining if it still makes
sense to hold municipal bonds to the same degree. Many retirees do not change their portfolio
when they retire, because there is so much going on during that time.
Will you be in a higher tax bracket when you retire?
If you are currently in the 10%–15% tax bracket, you may find that once Social Security, pension,
and required minimum distributions begin you will be permanently in the 25% (or higher)
tax bracket. If so, syncing your portfolio to your withdrawal strategy might mean using the 10%
spread between the 15% and 25% brackets to your advantage. Determine whether you have
large, long-term capital gains or losses. If so, then put a 3–5 year plan in place, to use losses or
realize gains in a smart way that works with your other assets. It’s possible that taking gains while
in the 10%–15% bracket could legally prevent the payment of capital gains taxes altogether.
Syncing Accounts of Varying Tax Qualifications
Some clients may be able to let IRA accounts defer as long as possible without needing the
income. Using a stretch-IRA strategy, these assets could be passed on to your heirs in the form of
inherited IRAs—which can be a very beneficial estate planning strategy. Syncing from a portfolio
standpoint might mean holding more long-term, growth-oriented assets in your IRA than in
other accounts, which will be used for income during your retirement.
Syncing Accounts and Asset Categories to Specific Goals
Janney Montgomery Scott
LLC, its affiliates, and its
employees are not in the
business of providing tax,
regulatory, accounting, or legal
advice. These materials and
any tax-related statements
are not intended or written
to be used, and cannot be
used or relied upon, by any
taxpayer for the purpose of
avoiding tax penalties. Any
such taxpayer should seek
advice based on the taxpayer’s
particular circumstances from
an independent tax advisor.
Many people do not have a plan in place for long-term care. For some clients, there could be
a smart way to reposition the cash value of life insurance to cover long-term care. In the case
of annuities purchased for income, where the income is no longer needed, this could also be
repurposed. Also, if not needed for income, your taxable required distributions (RMDs) from an
IRA could be leveraged into a larger, tax-free legacy for your beneficiaries.
We have the expertise, resources, and knowledge to help you sync your portfolio with your
retirement withdrawal strategy that best fits your needs.
Contact your Janney Financial Advisor today for a retirement income evaluation.
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