It’s estimated you’ll need at least 80% of your pre-retirement income to live comfortably during retirement. That’s why it is essential your investments – stocks, bonds, mutual funds, income from other sources (perhaps rental property or an inheritance) perform in a way that supports the lifestyle you want.

Our wealth advisors will work with you to create an investment plan that generates income and preserves your capital. Large portfolio losses and having to play “catch up” with our investments in retirement can keep us from doing, having and experiencing the things we want when we retire. A series of poor annual returns early in retirement can have a long-lasting negative impact on a portfolio.

This is why it is vital – based on your time horizon and risk profile – that you have a plan to protect and preserve your wealth from market downturns, and provides a conservative, but meaningful, return on your investments.

These days, achieving the financial independence you want to experience in retirement may take more than pensions, Social Security and savings – as more Americans are living longer. As you near retirement, the wealth management team at Holistic Wealth Partners works with you to plan from what accounts and when to draw income from your portfolio, how to adjust for inflation, and the strategies needed to withdraw from your savings and tax-qualified accounts so your retirement savings can last.

Having a personalized income plan in retirement can help ensure you have the financial support for the risks you could face in retirement. These include unexpected health care and long-term care costs, inflation, longevity (the risk that you’ll outlive your retirement nest egg), severe market losses and other unexpected expenses. The lifestyle you want to experience and financially maintain during retirement make it so important you have a plan that can generate income for the rest of your life.

Now is the time to begin planning to achieve the vision you have for the legacy you want to create to secure the financial future of your family and the next generation. Along with an estate planning attorney, the retirement planning and financial advisors at Holistic Wealth Partners will create an estate plan to transfer the ownership of your wealth or business assets in a tax-efficient way.

Having an estate plan in place can help minimize taxes so your beneficiaries receive as full a value for your estate as the tax code allows. We can also incorporate a charitable plan within your overall estate plan so that those causes you care about also benefit from the philanthropic vision you have for your estate and legacy. Planning now can minimize taxes and expenses for your beneficiaries.

Our planning will also review your current family dynamics and relationships so that your assets are directed in the time frame you specify to those beneficiaries who are truly a part of the legacy you want to pass on to future generations.

You may not realize that all those years you’ve been putting money aside in your 401(k)-style employer plan or Individual Retirement Account (IRA) may be creating a big tax burden when you retire. That’s because once you reach age 70½, the government requires that you begin to draw income from these “tax qualified” accounts through what’s known as Required Minimum Distributions, or RMDs. These RMDS are taxed as ordinary income.

There are a number of ways to reduce or even, in certain circumstances, eliminate the taxation on RMDs from some types of qualified accounts. This may include rollovers or conversions of an IRA, your current 401(k) or a previous account with an employer. At Holistic Wealth Partners, we can work with you to reposition those qualified assets that could potentially create a tax burden for you in retirement so that your tax exposure is minimized.

The primary purpose of life insurance is to provide death benefit coverage and legacy benefits for your loved ones. And that benefit is left to your heirs tax-free. But did you also know that life insurance can provide tax-efficient retirement income, help fund long-term care and other medical expenses, and even pay for a child or grandchild’s education?

In addition, depending on your financial situation, life insurance can be used to fund a portion of your retirement income – even while you are still working – by providing you with the ability to save tax-deferred dollars above what the government allows you to contribute into your 401(k) or IRA. Similar options are available for business owners who seek a tax-efficient exit or transfer of their business.

The funds that grow tax-deferred in the indexed or investment account of a life insurance policy in general are not subject to the same RMD rules as that of qualified accounts. You may also be able to access the cash value to take out policy loans without any tax penalties – if properly structured and under certain circumstances.

One of the top risks people face in retirement is unexpected medical costs and expenses and rising costs for prescription drug coverage. Medicare doesn’t cover all of these expenses so our retirement planning specialists may recommend strategies to help offset these costs if they do occur.

These strategies may also include potential coverage needs for long-term care (LTC) – a big risk to your financial well-being if you require care and don’t have a plan in place to pay for these costs. Medicare only covers medically necessary care and focuses on medical acute care, such as doctor visits, drugs, and hospital stays. And it doesn’t pay the largest part of long-term care services or personal care – like basic daily living activities.

So factoring in strategies to cover health-care and LTC costs to your financial and retirement plan makes sense. On the financial risk management side, it helps protect your assets and avoids having to spend down your retirement nest egg to qualify for care from the state. What’s more, insurance products and other financial strategies mean you get to choose the type of care you want to receive and won’t become a burden to other family members who may have to step in, if needed, to assist with your care.

The Florida Retirement System &
The FRS Deferred Retirement Option Program (DROP)

Holistic Wealth Partners’ Tommy Andersen is an advisory council member of the DROP Advisory Council. Member firms are selected for their experience and knowledge of the Florida Retirement System (FRS), the FRS Deferred Retirement Option Program (DROP) and the retirement field. Entering DROP allows you to effectively retire under the Florida Retirement System (FRS) Pension Plan, and begin accumulating your DROP retirement balance, while delaying your actual termination date for up to 60 months from the date you first reach your normal retirement date or your eligible deferral date.

As an FRS DROP participant, you simultaneously earn a salary while your monthly retirement benefits are held in the FRS Trust Fund on your behalf. Before you participate in DROP, you earn service credits for the time you have been employed by all FRS employers.

When you enter DROP, you are considered to be retired and you stop earning retirement service credits. While participating in DROP, your monthly retirement benefits accumulate in the FRS Trust Fund, earning tax-deferred interest while you continue to work for an FRS employer. Tax-deferred interest means that you pay any taxes owed when you receive the interest instead of when the interest was earned.

Beyond DROP

When your DROP participation ends, you receive your DROP payout and begin receiving your monthly retirement pension benefit in the same amount determined upon entering DROP, plus annual cost-of-living increases.

At the conclusion of DROP, we can provide you with an excellent strategy for your DROP account. We can offer you safe solutions to protect your DROP money from market loss. Our strategy also can provide you with a paycheck for life, like your pension and Social Security payments.

We will design a customized plan for you that takes into account your retirement income and liquidity needs and expenses. We can also help you avoid a taxable distribution by designing a creative IRA rollover solution.

As a DROP Advisory Council member, Holistic Wealth Partners has access to several DROP IRAs that can protect your contributions and earned interest from market loss.


Set Limits, Proactively Monitor, Confidently Act

Providing you with added peace of mind, WealthGuard™ securely tracks all of your accounts in one place. Working with your advisor, you set limits on your exposure to market losses depending on your risk tolerance and investment approach for each account. This process creates your WealthGuard Number.

The system then automatically monitors the activity in each of your financial accounts and changes in your overall net worth, increasing your WealthGuard Number as you add money or as market value increases. If the value of your account approaches your WealthGuard Number, the system leaps into action by alerting you and your advisor to market conditions that may indicate it’s time to act to protect your assets.