• John T. Halterman

The Top 5 Financial Planning Challenges Of Those In The Retirement Red Zone


By John Halterman

Are you between the ages of 55-75? Congrats, you are in the retirement red zone! It’s not as scary as it sounds, but these are vitally important years to get your wealth in order, with decisions and opportunities and challenges knocking at your door.

And if you’re affluent, with a high net worth and a large number of assets, that ups the ante. As you get closer to your career goodbye party, don’t stop strategizing and preparing quite yet.

Instead, take a look at these top five financial planning challenges of affluent people in the retirement red zone so you can prevent them from wreaking havoc on your dream retirement.

1. Your Financial Life Is Unorganized

As you’ve worked hard for many years, you’ve likely ended up with a random array of accounts, documents, and policies that you’ve accumulated over the years with no apparent strategy. As long as everything is scattered to the four winds, you won’t have an accurate picture of your wealth, which means you won’t have an accurate plan for your retirement.

Once you’ve identified everything in your financial junk drawer, it’s time to simplify, organize, and streamline, putting all the information in one place so you can see the big picture of where you are and where you’re going with the click of a button. This includes closing unused accounts and credit cards, consolidating accounts, reviewing and updating wills and powers of attorney, and making sure you’ve covered every base for your golden years. This will turn your junk drawer into a sophisticated system that keeps track of your future for you.

2. You Want To Maintain A Successful Lifestyle In Retirement

When retirement is a ways away, it’s easy to have vague ideas of what it will look like or how you will finance it. But as you get closer to that magical date, you need to start getting intentional about those ideas. Your hard-earned wealth has afforded you many opportunities in life, whether it’s pursuing hobbies you love, living in your dream house, or traveling with your family. Don’t you want to keep living that way in your later years too?

Of course, “successful” means something different for everyone. Many wealthy pre-retirees aren’t worried about running out of money, but they do worry about what their lives will look like once they leave behind jobs they love. It can be difficult to make this massive life transition. 64% of affluent pre-retirees admit that they expect to miss their work schedule more than their salary, and 73% don’t want health issues to lower their enjoyment of their retirement years. (1)

So whether you want to make sure you can afford your ideal retirement or you don’t want your quality of life to suffer, you need a plan. Talk to a financial professional about your life expectancy, the potential impact of inflation, healthcare concerns and options, and start taking tangible steps to create a retirement bucket list that will ensure your retirement is all you ever imagined.

3. You Want To Save On Taxes

Taxes can strike fear into anyone, but even more so those who have more to their name. The earlier you plan, the more you can minimize the effects of taxes when you retire and no longer have paychecks coming in. This not only includes investing in the right accounts and planning your withdrawals wisely, but also strategizing your charitable donations, being aware of capital gains tax laws, and planning your estate in such a way to both minimize your taxes and reduce them for your heirs as well.

No matter how much money you have, you can use tax laws to your benefit and, as a result, fork over less money to the government.

4. You’re Worried About Switching From Accumulating To Withdrawing

It can be unnerving to go from earning an income and maximizing your savings to withdrawing from your nest egg with nothing going back in. This is why you need to create a withdrawal strategy based on your unique life situation. Your withdrawal strategy, or lack thereof, is a big deal and can have a major impact on how much of your hard-earned money you ultimately keep. If you blindly take your money and run, you could trigger an avalanche of higher Social Security taxes, investment surtax, capital gains taxes, and even higher Medicare premiums which will eat away at the funds that were supposed to carry you through retirement.

It’s essential to work with someone who specializes in retirement planning to come up with a withdrawal plan that is “safe” for you. This withdrawal rate should be sustainable, even in the worst-case scenarios. You also need to look at time horizon and asset allocation. The sooner you start tapping into your funds, the lower your rate should be in order to stretch your money for as long as you can.

5. You Don’t Want The Markets To Destroy Your Investments

If only we could predict the markets, we could rest easy. Since that’s not real life, you need to be aware of sequence of returns risk and plan for it accordingly. If you face a market downturn in the early years of retirement while you are also withdrawing money, you could lose more than you ever stand to recover. And the more you have, the more you have to lose. Just ask those who retired around the 2007-2009 recession.

Because of your wealth, you need to be even more vigilant about preparing for this challenge. What is the make-up of your savings? Are you still taking as much risk as you did when you were 40? Are the majority of your investments illiquid, such as land or real estate? You don’t have to swing to the extreme and make your accounts as conservative as possible, but you do need to make sure your money will last, even if losses hit.

What Do I Need To Do?

Have you ever considered these challenges and what they could mean for your retirement years? If not, don’t worry, we have thought through the details for you. If you want to partner with someone who understands the intricacies of your situation and is passionate about walking you through the retirement red zone with confidence, book your free 60-minute discovery consultation today!

About John

John Halterman, best-selling author and nationally published blogger, has been featured as a financial guest expert on the shows of self-help gurus Brian Tracy and Jack Canfield, author of Chicken Soup for the Soul, and has appeared on ABC, FOX, BRAVO, NBC, CBS, and A&E. John is the expert host of the weekly WDTV News 5 segment “Solutions 4 Financial Independence.”

As an authority on wealth management, he has been invited by hundreds of institutions such as universities, federal agencies, professional associations, and large energy and utility corporations to be a guest speaker and educational event host. Event topics include retire ready, managing down market investment risk, how to reduce your tax burden, and transferring your family wealth in the most tax advantageous way.

John is the founder and owner of Beacon Wealth Management, specializing in helping entrepreneurs, professional practitioners, and retirees overcome the 5 major challenges facing successful families. He is a warm communicator with a passion for helping people transform their financial futures. John understands the multifaceted set of financial worries people face as they become more successful and enter the Retirement Red Zone. He empathizes personally with each client and delivers a collaborative client experience that empowers people to reach their life goals.

With more than two decades of experience, John’s professional credentials include Certified Wealth Strategist, Accredited Investment Fiduciary, Certified Estate Planner, Chartered Federal Employee Benefits Consultant, Professional Plan Consultant, and Registered Financial Consultant. He is also a past member of Ed Slott’s Master Elite IRA Study Group.

A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a wealth advisor. Today, he resides with his family in Clarksburg, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-oriented man, he enjoys giving back to his community, coaching youth sports, landscaping, architectural design, and playing racquetball.

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(1) https://www.plansponsor.com/retirement-planning-differs-for-wealthy-versus-non-wealthy-pre-retirees/


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