Life Stage: At Retirement

Today’s retirements will generally be longer, more active and more expensive than any previous generation’s. That’s why it’s critical at this stage to get professional advice from a financial team –  your accountant, an estate attorney, and a financial professional who can help select products to help achieve your goals. It’s one of the most important things you can do for your portfolio and future comfort.

Your Portfolio: Balance Conservation and Growth

The closer you get to retirement, the more you will likely want to protect your portfolio by moving to a more conservative asset allocation. Then, at retirement you need to make the additional step of calculating your annual income needs and an asset allocation balance between investing for needed income and, if possible, for growth as well.

Keeping some amount of your portfolio invested for growth is still as desirable as ever to most people, but it has greater risk during retirement.

To provide additional retirement income, consider the wide variety of fixed, variable and immediate annuities available from AXA Equitable, which can guarantee lifetime income streams.

Portfolio Management

It’s also a time to simplify your life by consolidating scattered investment accounts – including possibly a variety of employer sponsored retirement accounts accumulated over your career – into fewer accounts that can then be more carefully and economically managed.

Be careful when making any rollovers from previous employers’ retirement plans to a new employer’s plan or your own rollover IRA. Not following the proper procedure could cost you up to 20% in withholding and possibly a 10% IRS tax penalty.

While the ideal goal may be to avoid dipping into your principal at all, most retirees will need to do so at some point. So it is vital to calculate how much you can comfortably take each year. How much depends on your age, your income needs, how reliable your planned income may be, and other factors. A qualified financial professional can help you calculate an approach, as well as products that may help ensure that your money lasts.

Also, keep in mind that you must take “Required Minimum Distributions” (RMDs) from certain retirement accounts each year once you reach age 70-1/2. Your financial professional can help you calculate these withdrawals.

You should consult with your accountant before starting to take Social Security income, including the possible tax impact of earning income while receiving Social Security.

Your Legacy

In consideration of your heirs, this may also be a good time to begin thinking about estate planning.  One basic first step you should take is to check that the beneficiaries on your retirement accounts are entirely up to date, and you might consider converting pre-tax retirement accounts -- such as traditional and rollover IRAs -- to Roth IRAs, which can then pass to your heirs tax-free.