Around four million Americans are expected to retire in 2024 – or 11,200 every day. For financial planners, ensuring their clients are diversifying their investment portfolios enough to remain consistent is a pressing concern, as is ensuring people have access to a stable and secure fund.
Benjamin Brandt, president and founder of Capital City Wealth Management, says that the importance of balancing growth and income, especially in the face of inflation, has only heightened of late.
“There’s always a new flavor of the week when it comes to investing for retirement. Inflation is the big term of the decade. The best way to fight inflation is to outgrow it, which is great while you’re accumulating. How do you have growth and income at the same time? We use the tried-and-true 60/40 portfolio. We’re not focusing on growth or value or dividends; we’re focusing on everything total return.”
A key strategy Benjamin recommends is deferring Social Security benefits as long as possible.
“One of the biggest things that nearly every retiree can do is just to defer Social Security as long as possible. We’ve got income that you cannot outlive. There are joint and survivor benefits. It’s indexed to inflation. The longer we wait, the bigger the benefit is. If that was a financial product you could sell, you’d have people lined up around the block.”
Tax planning is another crucial aspect of retirement strategy, as is helping clients calculate their long-term tax liabilities.
“For most people, it’s easy to neglect taxes in retirement. Looking through that lens, most of the clients we’re talking to then saved up a good amount of money. They’re facing high six figures, even low seven figures in total tax liability. Voluntarily paying more taxes now will allow us to pay substantially less taxes later. The primary way to do that is gains harvesting, Roth conversions, things like that. When you’re retired, you have ultimate control over your income. So, we can get really creative in intentionally having a very high-income year followed by low-income years, which give us other advantages.”
Benjamin’s podcast, Retirement Starts Today, on which he addresses various retirement- planning topics, has become an essential part of his client education.
“We answer one question a week on our listener question segment,” he adds. These questions come from an annual listener survey, with responses feeding into a Google Sheet containing hundreds of queries.
“I never thought I’d get to Episode 100, and here we’re closing in on Episode 400.”
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