Date: March 25, 2024

Top Retirement Questions Answered By Fiduciary Financial Advisors

When you think about retirement, what comes to mind? Most people think about pleasant images of relaxation, activities (golf, pickleball), travel, and spending more time with family and friends.

Ideally, your early retirement years can be very enjoyable, but you should also be preparing for your mid and late-retirement years when your lifestyle begins to change. Plus, you can be retired for 30 or more years, so the earlier you start planning, the better. Running out of money late in life may be one of your biggest financial concerns. 

We can help! 

If you’ve accumulated $500,000 or more of investable retirement assets, this article is for you. As a fee-only financial advisor in Connecticut, I help successful individuals and families develop defensive retirement plans that address their top retirement questions and concerns.

At Heritage Capital, we understand wealth is more than just numbers: Income, expense, and investment performance. It’s about freedom, lifestyle, financial security, and the ability to pursue your passions stress-free. 

Let’s get started.

Retirement Concern #1: Running out of Money Late in Life

Running out of money late in life can lead to significant hardships, primarily because it might limit your ability to afford essential healthcare, housing, and other critical living expenses. This situation can also impose a financial and emotional burden on other family members who may need to provide additional support.

Heritage Capital Insight: Just like summer turns to fall and fall to winter, after every bull market’s climb, a bear market’s decline is increasingly inevitable. 

When the 2008 financial crisis occurred, the stock market experienced substantial losses exceeding 50%. Many investors were counseled by their advisors to “stay the course” as part of their classic buy-and-hold strategies. The problem with this tactic is if you’re close to retirement or already enjoying your golden years, this advice might not be in your best interests.

Why? Because you might have to withdraw capital at the worst possible time, which causes you to take an “unrecoverable loss.” This capital is no longer available to produce income. That can create some severe hardship down the road when healthcare and other costs are rising. Additionally, a 50% loss requires 100% gain, just to get back to breakeven and you still need to withdraw money to fund your lifestyle. 

Instead of a buy-and-hold strategy, our firm employs active management strategies that focus on protecting what you already have while investing in growth opportunities with suitable risk characteristics.

There’s no magic formula when it comes to investing. The market is constantly moving up, down, and sideways. It is responding to constantly changing economic conditions that impact companies’ earnings. What works today might not work next month or year.

By diversifying what you invest in and how you do it, you can set yourself up so that when a part of your portfolio is down, another part may be up, helping you weather the storm. 


Watch Paul Schatz, our founder answers your commonly asked questions.


Retirement Concern #2: The Impact of Market Volatility and Inflation

Given the persistent inflation we’ve experienced for the past three years and subsequent market volatility, many people are concerned about maintaining their standard of living, especially if they are planning to retire soon or have already retired.

Market volatility and inflation pose significant challenges, impacting your retirement savings’ value and purchasing power – you might call it the double whammy. Fluctuations in the market can erode the value of investments, while inflation decreases the purchasing power of the income you live on, making it harder to cover your expenses.

Heritage Capital Insights: To counter these concerns, consider three financial strategies:

  • Spreading your assets across various investment types reduces your risk of significant losses and helps buffer your assets against market downturns. A mix of stocks, bonds, and other types of assets can balance risk and return, making your portfolio less susceptible to significant market fluctuations.
  • A reserve of easily accessible funds can provide financial stability during market downturns or spikes in inflation. This reduces the need to liquidate assets at an inopportune time. Also, the assets are no longer available to produce income.
  • Adopting a flexible withdrawal strategy from your retirement accounts can help mitigate the impact of market volatility. During down markets, reducing withdrawals can preserve your portfolio’s longevity, while in better economic times, you might increase withdrawals very cautiously.

Retirement Concern #3: Taxes in Retirement

No one wants to pay Uncle Sam more than they have to. This is especially true for retirees. Taxes are expenses. Every dollar of expense means you have one less dollar for your future use.

Taxes in retirement can significantly impact your financial well-being. Understanding the tax implications is crucial as you transition from earning a regular income to relying on retirement savings, Social Security, and other income streams that may be available to you. 

Without careful planning, you might face unexpected tax bills that can erode your retirement savings faster than anticipated.

Heritage Capital Insights: Here are three financial tactics to consider as a way to mitigate your tax exposure once you retire: 

  • Develop an asset location strategy. This involved strategically placing different investments inside various accounts (e.g., taxable, tax-deferred, tax-free) to maximize after-tax returns. The goal is to reduce your investment tax burden while maximizing your tax-advantaged accounts. For example, let’s say you have taxable and tax-advantaged accounts like a personal savings account and an IRA. If you have bonds that generate regular interest income, taxed as ordinary income, you may want to place the bonds in your tax-advantaged accounts (an IRA) so the interest income would grow tax-deferred or potentially tax-free (in the case of a Roth IRA), thus reducing your tax burden and producing higher net returns for the future.
  • Converting a portion of your tax-deferred accounts to a Roth IRA can provide tax-free growth now and tax-free withdrawals in the future. At the same time, this entails paying taxes on the converted amount (traditional IRA to Roth IRA); doing so now may improve your quality of life and financial security later in life.
  • Another essential strategy is to plan the timing and order of your withdrawals from your retirement accounts to minimize taxes. Typically, it’s wise to withdraw from taxable accounts first, then tax-deferred accounts, and finally, tax-free accounts. This can help stretch your savings and keep you in a lower tax bracket.


Watch our founder, Paul Schatz, discuss the top five tax tips. 


Retirement Concern #4: When to Take Social Security Benefits

Deciding when to take Social Security benefits can be critical because it may significantly impact your current and future standard of living and financial security during your mid and late retirement years. 

The earlier you begin receiving benefits, the lower your benefit amount will be. If you delay taking your benefits up to 70, you can increase the monthly payments substantially. 

Your decision should be influenced by your current financial needs, health status, life expectancy, and need for income sources during earlier retirement.

Heritage Capital Insights: A practical tactic to address this concern is thoroughly analyzing your financial situation considering current and anticipated future needs. This includes evaluating retirement savings, debt levels, other income streams, expenses, and lifestyle expectations. 

It’s also wise to consult with a fiduciary financial advisor with an AIF designation to compare the long-term consequences of different scenarios based on starting the benefit at various ages. This approach helps you make an informed decision that aligns with your personal and financial circumstances, ensuring a more stable income stream throughout your retirement.

If you’re ready to take your retirement planning to the next level, we invite you to connect for an introductory call.

plan a bulletproof retirement



Paul Schatz, President, Heritage Capital