Investment Planning for Retirement in Minneapolis, MN

by | Nov 22, 2022 | Financial Service

Have you been thinking about retirement? You may have many questions about investment planning for retirement in Minneapolis, MN. You might be wondering about asset allocation, investment selection, or the order you should withdraw from your investment accounts. Here are a few topics to discuss with your financial advisor.

What is the best withdrawal order? Planning retirement income may require a careful strategy for withdrawing funds from your various investment accounts. After first taking any mandatory RMDs (Required Minimum Distribution), you will need to make decisions about withdrawing from other accounts. Should you withdraw from your taxable accounts? Or from your tax-deferred accounts? Or a combination of both? The answer may be influenced by your current tax bracket compared to the tax bracket you anticipate for the future.

Are partial Roth conversions for you? To decrease the impact of RMD obligations and the taxes incurred, you may find that partial Roth conversions will give you a head start to tax efficiency on your IRA withdrawals. You may find that doing partial Roth conversions from your traditional IRA to your Roth IRA when your income is lower, may help you avoid paying more taxes later in retirement when your income may be higher. Funds in a Roth IRA are not subject to RMDs and can grow tax-free.

What will your spending needs be in retirement? Your spending needs will likely shift throughout the retirement years. For instance, in early retirement you may spend more on travel and leisure. Later in retirement, you may have more expenses related to healthcare. To project your retirement income needs accurately, you will need to consider inflation and potential long-term changes in your basic living expenses.

A financial advisor can help you tailor the approach to fit your unique situation.

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