FAQs: Retirement & Volatile Markets


Frequently Asked Questions About Retirement Planning in Volatile Markets

With continued volatility and uncertainty in the market, you may be wondering how it's affecting your retirement planning and financial security. Here are some answers to questions we've received regarding action you can take now, considerations, and pitfalls to avoid.  

I've heard historically that we can draw 4% of our portfolio annually - does this model still hold?

4% draw is a rough approximation that we often reference as a starting point. We don't use this estimate for our client cash flow projections for a variety of reasons.

If I plan to live to over 85 years, should I wait until I'm 70 to draw social security?

The breakpoint for delaying Social Security Income (SSI) to age 70 is mid-80s. It's only after this point that you would actually receive more dollars. The bigger factor in delaying SSI is whether or not you are still working and the tax rate applied to that additional income.

For those still working, are there income limits to the Roth conversion idea?

There are no income limits for Roth Conversions, but Roth Conversions tend to be more advantageous when you are in lower income tax brackets, such as once you start winding down to retirement. The tax rate you would pay is the biggest deterrent. Roth conversion dollars are considered ordinary income on your tax return. 

Are tax-loss harvesting (and other "tax-aware" strategies) actively managed or is this a special investment management service I should request?

BakerAvenue proactively takes advantage of tax loss harvesting for all clients. In addition, your advisor can review this with you at your next meeting.

What if I want to completely cash out of my Roth IRA?

Your Roth IRA is considered after-tax dollars that can generally be pulled out of your account at retirement age. There are a few rules related to this and we can follow up to confirm that none of them apply to you.

For more information on retirement considerations in volatile markets, watch our full webinar recording below, or contact BakerAvenue to learn how we can help you navigate through your specific circumstances surrounding your retirement plan. When you need financial advice for your personal and professional life transitions, BakerAvenue is here for you.