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The Ultimate Guide to Financial Planning for Retirees

Cypress Wealth Services

October 2022

There’s a common misconception that financial planning is only helpful in the years leading up to retirement. But that couldn’t be further from the truth. In fact, financial planning is even more important after reaching your golden years. Your resources are fixed, while your life expectancy and long-term needs are difficult to predict. With proper planning, you can maximize the longevity of your retirement savings and reduce your risk of running out of money. In this guide, we’ll review the top 5 concerns for retirees and how financial planning can help you overcome them.

1. Taxes

When it comes to withdrawing from your retirement accounts, how you take your distributions can make all the difference. Your retirement income sources are likely produced from a variety of assets, including employer-sponsored retirement plans, Social Security, personal IRAs, or other income-generating investments. Each asset has different tax characteristics, and properly structured investments can help lower your tax burden if you plan how and when you’ll withdraw from each.

For example, most people will receive Social Security benefits during retirement, but 85% of your Social Security income can be taxed at your regular tax rate if your total retirement income exceeds a certain amount.

Regarding your personal savings, a $50,000 withdrawal from a Roth IRA will have a wildly different tax impact than that same distribution from a traditional IRA. If you blindly take your money and run, you could trigger an avalanche of higher Social Security taxes, investment surtax, capital gains taxes, and even higher Medicare premiums, which will eat away at the funds that were supposed to carry you through retirement. Creating a withdrawal strategy and a tax plan can help you maximize your retirement funds and improve your financial situation.

2. Inflation

Another major challenge we see new retirees face is inflation. As 2022 has shown, it is not enough to rely on the historical average when planning for inflation. In September 2022 alone, inflation reached 8.2%, which drove the cost of everyday necessities (like food, gas, and healthcare) up significantly. Though this level of inflation will not last forever, even a more conservative 3.8% increase each year can drastically affect the longevity of your retirement income.

Not only that, but healthcare costs tend to rise faster than inflation, and they can become a huge burden later in life if you’re not taking proactive steps to account for this increase.

This often comes in the form of investing a portion of your retirement savings in growth-oriented assets. Many retirees shy away from investing in the market due to the high possibility of short-term volatility. But with a retirement that could easily last 20 to 30 years, inflation is still the biggest threat to your nest egg. Working with a trusted professional who can help you strike a balance between protection and growth is a great way to minimize or overcome inflation.

3. Long-Term Care

There are many things you don’t want to gamble with in life; your retirement savings, your kids, and your long-term health are just a few. Unfortunately, long-term health takes a back seat for many Americans, with few people incorporating the possibility of long-term care (LTC) into their overall financial plans. Since today’s 65-year-olds have nearly a 70% chance of needing some form of LTC, it’s crucial to have a plan to pay for these costs.

The unfortunate reality is that LTC costs are so high that they could potentially wipe out the bulk of your retirement funds. In 2022, the national LTC average cost is $306 per day or $9,305 per month for a private room in a nursing home!

There are many ways to plan for the cost of LTC, including long-term care insurance, life insurance with an LTC rider, and self-insurance. No matter which option you choose, it is crucial to plan ahead and start thinking about the possibility of LTC between ages 50-60.

4. Social Security

When to claim Social Security benefits is an age-old question that rarely has a clear answer. And many people will retire before they’ve figured out their ideal age for Social Security benefits.

Because you can claim your benefits anytime between ages 62 and 70, it can be difficult to determine which option makes the most sense for you. Your benefits will increase each year you delay, for a maximum benefit amount at age 70, and claiming benefits before your full retirement age will result in a lower benefit amount.

Since Social Security benefits are calculated using complex actuarial equations based on life expectancy and estimated rates of return, they are not designed to encourage early or late retirement. If you live as long as anticipated, the total amount you receive over your lifetime should be about the same whether you claim it at age 62, age 70, or sometime in between. You will either receive the money as a smaller monthly payment over a longer period of time or a larger monthly payment over a shorter period of time.

The best time for you to claim your benefits depends on your personal situation and health. If you expect to live longer than average, your overall lifetime benefit will be greater if you delay claiming your benefits to increase your benefit amount. If the opposite is true and you see little chance of making it into your mid-80s, you would likely receive a greater lifetime benefit by taking it sooner, even though it would be a smaller monthly payment.

Once you decide when you want to start receiving benefits, remember to complete your application three months before the month in which you want your retirement benefits to begin.

5. Estate Planning

When was the last time you updated or reviewed your estate plan? Perhaps more importantly—do you have an estate plan that includes all the necessary documents and covers all your bases? If not, you’re not alone. In 2022, only 33% of adults had an estate plan in place.

The consequences of not having an estate plan can be severe for your surviving loved ones, resulting in unintended consequences in the form of estate and gift taxes, incorrect beneficiaries, disputes among heirs, and costly delays due to the probate process. Just look at Jimi Hendrix, who died without an estate plan in 1970. The battle over his estate continues today (more than 50 years later!), all because he had no will.

Don’t let your family and your legacy suffer the same fate. Make sure you regularly review your estate plan and beneficiary designations to ensure your wishes are fulfilled, and your legacy passes smoothly to your heirs.

Don’t Go Through Retirement Alone

It took decades of strategizing to grow and safeguard your wealth up until this point. Don’t just “wing it” in retirement and manage your money alone. Having a trusted financial advisor by your side can be the difference between having a retirement fund that dries up and having one you can’t outlive.

At Cypress Wealth Services, we use our proprietary process, The Second Growth, to help retirees efficiently protect, grow, and transfer their wealth. Call us at 866.888.6563 or contact one of our offices to get started today.


About Cypress Wealth Services

Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high-net-worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services serves a broad range of client needs using their experience and expertise to act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring the wealth and legacy a person has already built to their loved ones. With financial advisors in Palm Desert, CA, Tustin, CA, Athens, GA, and Anchorage, AK, the firm serves clients across the country with Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit or call 760.834.7250.