Giesting Financial’s own Thorn Murphy recently joined Retirement News Online, an outlet that often enlists in experts and financial professionals to discuss topics such as planning for retirement income.
Thorn was first asked about the transition from portfolio growth to portfolio distribution, assessing income needs and easing the transition into retirement. He said:
We do a custom plan for every one of our clients. Usually when you get about five to seven years out from retirement, we start developing a liquidation strategy. The two main things we really want to focus on are tax planning and making sure our clients do not run out of money, and those two factors make planning different for everyone.
As you’re probably well aware, planning for retirement can’t start at retirement. To be adequately equipped to handle the peaks and valleys that come in your post-career life, you must begin planning early. At Giesting Financial, we can help you assemble a custom-designed plan, no matter where you are in life. That plan follows you all the way through retirement, and once we can chart an expected retirement date, we can begin strategizing for the proper distribution that keeps your desired lifestyle throughout your life.
Thorn discussed the 4% rule, a common standard in retirement planning that calls for retirees to withdraw 4% of their retirement accounts each year for 25 years of retirement. Thorn says:
Withdrawing 4% is an industry standard that has been out there for a long period of time. In my opinion, that’s more of a shotgun approach. What we do with each one of our clients is really dial in using a more targeted approach. With some people, 4% might work, but it won’t work for others. We build a custom plan to see if 4% holds true for you.
While we are not immediately deterred by industry standards and tried-and-true methods of collecting retirement income, we know that our clients aren’t statistics, and no cookie-cutter approach will work for everyone. It’s our job to find a strategy that will provide income that you won’t outlive, and if the 4% rule doesn’t properly cover that base, we won’t be using it when it comes time for you to begin taking withdrawals from your savings.
Next, Thorn was asked an age-old question. When is the best time to take Social Security benefits? He says:
That’s always a tricky question. If I knew when someone was going to die, I could tell them exactly when they should be claiming Social Security. For my clients, I usually run an analysis for them through a Social Security analyzer, but I also advise them to pull a little bit more out of their 401(k) or IRA earlier so that we can delay Social Security to get that guaranteed 8% bump each year. Each year that you wait to take Social Security gives you a guaranteed 8% growth in your benefit, so a lot of the times it makes sense to delay a little bit longer.
Just as there is no one answer for retirement planning, there is no perfect answer for when to claim your Social Security benefit. Obviously, the ideal scenario is waiting until you’re 70 years old, building your benefit to somewhere between 124% and 132% of its full total depending on your full retirement age. Unfortunately, the world is filled with variables, but it’s our goal to guide you to age 70 by building your savings to sufficiently support you while you maximize your Social Security benefit.
Finally, Thorn addressed life expectancy and the risk of running out of money in retirement, saying:
Life expectancy is usually in the mid-80s, but we build our plans conservatively, planning for our clients to live into their hundreds. We want to try to make sure our clients are comfortable knowing they won’t run out of money.
In retirement planning, we find it’s better to overestimate life expectancy than to underestimate it. Our dream is to see our clients live long, fruitful lives with well-funded lifestyles, so that’s exactly what we plan for.
To watch the entire video featuring Thorn Murphy on Retirement News Online, you can click right here.
If you’re ready to take the next step with us, please give us a call. You can reach Giesting Financial in Batesville, Indiana at 812.933.1791 or in Columbus, Indiana at 812.565.2726.
This article is for informational purposes only and not to be construed as financial or investing advice, nor is it a replacement for real-life advice based on your unique situation.
Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite #150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Securities are offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated.