Cash Flow Analysis

The impact of inflation

The average cost of goods and services in the United States has risen 3.30% per year since 1914. Certain items like medical costs and education expenses have increased at a more rapid pace. One of the primary concerns of retirees is running out of money if they live too long. Our cash flow analysis can accurately determine the impact inflation will have on your portfolio and assist in structuring the appropriate investment portfolio to meet your current and future cash flow needs.

Managing cash needs tax-efficiently

For most retirees, their fixed income (Social Security, pension, etc.) is not enough to meet their general living expenses. Therefore, they need to rely on their investments to meet the shortfall. Is it better to pull money from your retirement accounts (IRA’s, 401(k), etc.) or your other after-tax investment accounts? What are the tax implications of this decision and ultimately how will it impact your future retirement security? We analyze these decisions carefully to make sure our clients are minimizing income taxes and maximizing their returns throughout retirement.

Required minimum distributions

Once you are over the age of 73, the IRS requires that you begin withdrawing money from your retirement plans (IRA’s, 401(k)’s, etc.). This money has been growing tax-deferred for most of your life and now these distributions will be subject to ordinary income tax rates. The IRS now uses a standardized table to determine the minimum amount of money a person is required to withdraw (and pay income taxes on) in a given year. This table is for both married and single people*. In most cases, it is appropriate to withdraw the minimum amount required by the IRS. However, in some circumstances, accelerating distributions makes sense. We can help you determine the best distribution approach for your situation.

Social Security – when to begin and how is it taxed?

Social Security is the primary source of fixed income for retirees. We have seen several changes in Social Security over the last several years to account for the approaching baby boom generation and the fact that people are living longer. Social Security 2023 Fact Sheet Does it make sense for you to start Social Security at age 62 or at your normal retirement age? We can help you answer this important question.

* A different IRS table is used if you have a spouse more than 10 years younger than you.