I had a recent client case which I thought was worth sharing which is illustrative of when it can be advantageous to take a lump sum over a monthly pension. Roger and Ingrid (not their real names) are ages 60 and 67, respectively. Ingrid is retiring this year and Roger plans to continue to work for another six years until his full retirement age. Ingrid, working for Kaiser Permanente, has an option of taking either a monthly pension or a lump sum. When we reviewed the options, the … [Read more...]

In our previous articles, we introduced the Buckets and Tools Approach to Retirement Planning. In essence, we categorize each dollar available for retirement among the four necessary priorities of liquidity, income, protection from premature death and long-term care, and growth. After providing enough money for emergency reserve and short-term goals (the liquidity bucket), the next most important priority is covering the income gap that exists between predictable income and … [Read more...]

As much as I believe in the value of incorporating housing wealth into improving retirement outcomes, there are always caveats when using these tools. I have written extensively on the use of the Home Equity Conversion Mortgage (HECM). You can easily find previously written articles here. One has to balance two issues when determining whether or not to implement the HECM and the timing of pulling the trigger: 1.  Delaying the implementation of the HECM mortgage can have the … [Read more...]

There can be a lot of confusion about the impact of taking Social Security benefits before full retirement age. In this article, we will look at three issues that can impact these benefits and, hopefully, clear up some of the misunderstandings by directing you to articles dedicated to each one. The first issue relates to the amount of your Social Security benefit if it is claimed before full retirement age., The amount of your Social Security benefit will be reduced permanently if you take it … [Read more...]

For part three of our series of how the new SECURE ACT may have impact on retirees, we move to the topic of Stretch IRAs. Before the Act, non–spouse beneficiaries could take required minimum distributions over their younger life expectancy, requiring less to be distributed and taxed each year. Now, these same beneficiaries must make IRA distributions by the end of a 10 yearr time period. This new law impacts accounts in which the death of the owner occurs after December 31, 2019. For a … [Read more...]