Pre-Retirees & Retirees
Planning for the years after the paycheck stops
For people a few years from retiring, and for people already there. You need neither a business to sell nor a family office: a career of saving, and the question of how to live on it, is reason enough to call.
In short
MTP Private Wealth at Farther helps people approaching or in retirement turn their savings into income: which accounts to draw from and in what order, when to claim Social Security, whether Roth conversions make sense, and how required distributions, Medicare premiums, and estate documents fit around them. We coordinate the work with your accountant and attorney.
Where you might be
The moments when retirement planning gets specific
None of these needs a large estate or a complicated business. Each one is a decision with a deadline, a tax consequence, or both.
- You plan to stop working within five years and want to know what your savings will support.
- You have retired, and your income now comes from accounts you spent decades filling.
- You have a 401(k) at a former employer and have not decided whether to leave it, move it, or roll it over.
- A required distribution or a Medicare premium came in higher than you expected.
- Your will, trusts, or beneficiary forms were signed before the grandchildren, or before the shore house.
- You are deciding whether to keep the house, sell it, or make the shore house your home.
Turning savings into income
The income decisions, in the order they usually arrive
Each choice changes the tax on the next, so we plan them together.
01
What your savings will support
Before the last paycheck: what you spend, what your savings, any pension, and Social Security can support, and how the plan holds up if markets fall in the first years. If you stop before 65, it also has to cover health insurance until Medicare begins.
02
When to claim Social Security
You can claim from 62, your full retirement age is 67 if you were born in 1960 or later, and waiting past it raises your monthly benefit until 70. For a married couple, the higher earner's timing also sets the survivor's benefit, so we plan the two claims together.
03
Which accounts to draw from first
Taxable accounts, traditional IRAs and 401(k)s, and Roth accounts are each taxed differently when money comes out. The order you draw on them changes your tax bill across retirement, and what your heirs owe on what is left.
04
Roth conversions in the lower-income years
The years between your last paycheck and your first required distribution are often the lowest-tax years you will have. Converting part of a traditional IRA to a Roth then means paying tax at that rate, and a Roth IRA has no required distributions while you are alive.
05
Required minimum distributions
Withdrawals from traditional IRAs become required at 73, or at 75 if you were born in 1960 or later, and employer plans can usually wait until you retire if that comes later. Each year's amount comes from your prior year-end balance and an IRS life-expectancy table, whether or not you need the money.
06
Medicare premiums and your income
Medicare begins at 65, and signing up late can make Part B and Part D cost more. Above certain incomes the premiums also rise, based on your tax return from two years earlier, so a large IRA withdrawal, Roth conversion, or property sale can raise them two years later.
Around the income
The rest of the plan that retirement changes
The income plan is half the work. The other half is protecting what you have and deciding where it goes.
Your old 401(k)
You can usually leave it in your former employer's plan, move it into a new employer's plan, roll it to an IRA, or take the cash. Each differs in fees, investment choices, withdrawal rules, and protection from creditors, and we set the options side by side before anything moves.
Long-term care and insurance
How you would pay for a long stay in care if you needed one, and whether the life insurance you carry still has a job to do once the paycheck stops.
Estate documents and beneficiaries
Your will, trusts, and powers of attorney, checked against the family you have now. Beneficiary designations on retirement accounts and insurance pass outside the will, so we review them alongside it, with your estate attorney.
Gifts to family and charity
Helping children and grandchildren while you can see the gift used, and giving from an IRA once you reach 70½. A qualified charitable distribution goes straight to the charity, counts toward a required distribution, and stays out of your taxable income.
The house
Keeping it, selling it, or making the shore house your home each changes your property taxes, the income you need, and possibly which state you file in.
Planning for the surviving spouse
After one of you dies, the household keeps the larger of your two Social Security benefits rather than both, and from the following year the survivor usually files taxes as a single person. Planning for that now changes how much to convert to a Roth and how accounts are titled.
Common questions
Questions about retirement income
No. Our private clients include high-earning professionals and retirees as well as business owners, and the decisions on this page apply whether your savings came from a company or a career. We look at the situation rather than a number, and if yours does not need a firm like ours, we will say so on the first call.
Three to five years before you stop working, if you can. That leaves time to adjust savings, plan when each of you claims Social Security, and use any lower-income years for Roth conversions. If you have already retired, most of the same decisions are still open, and some, like required distributions, come back every year.
Differently. Pennsylvania leaves Social Security, IRA withdrawals after 59½, and employer plan payments to retirees untaxed. New Jersey does not tax Social Security either, and residents 62 or older with total income under the state's limit can exclude some or all of their pension and IRA income. Federal tax applies in both states, and we plan withdrawals with all of it in view.
Recent statements for your retirement and investment accounts, your Social Security estimate from ssa.gov, any pension paperwork, and last year's tax return, if they are handy. None of it is required for a first call, and we can go through it together afterwards.
Next step
Start with the accounts you already have
The first conversation is half an hour, by phone or in the Marlton office, and costs nothing. If your situation is not a fit for this firm, we will tell you and suggest where to look.