What Is Retirement Investment Planning?
Retirement investment planning focuses on how accumulated assets may support spending throughout retirement.
Retirement investment planning Tennessee households use should consider more than portfolio allocation. The strategy also needs to account for income needs, taxes, liquidity, inflation, and the length of retirement.
Start With the Retirement Plan
Investment decisions should follow the retirement plan.
Begin by estimating spending and identifying reliable income sources. Then consider how much of the remaining need must come from investments.
This provides context for portfolio decisions.
Consider Different Account Types
Retirees may have assets in:
Traditional IRAs
Roth IRAs
Employer retirement plans
Taxable brokerage accounts
Cash accounts
Business interests
Other investments
Each account may have different tax and withdrawal characteristics.
Balance Current and Future Needs
Retirement investment planning often requires consideration of multiple time horizons.
Some assets may need to support spending in the next few years. Other assets may be intended for spending decades into retirement or for legacy goals.
This can influence how investors think about liquidity, diversification, and asset allocation.
Taxes Matter
Withdrawals from retirement accounts can affect taxable income. Investment income and capital gains may also influence the overall tax picture.
ProffittGoodson describes retirement and investment planning as connected with tax planning, required minimum distributions, and broader financial planning.
Tax-specific recommendations should be reviewed with an appropriate tax professional.
What About Market Volatility?
Market fluctuations are part of investing. Retirement planning should consider how portfolio withdrawals may interact with periods of market volatility.
The appropriate response depends on the individual's goals, liquidity, risk tolerance, and investment strategy.
Review the Strategy
A retirement investment strategy may need to be reviewed after:
Retirement
A change in spending
A major inheritance
A business sale
A significant family change
Changes in tax rules
Changes in income sources
Conclusion
Retirement investment planning Tennessee retirees undertake should connect investment allocation with spending, income, taxes, liquidity, and long-term goals. A retirement portfolio is most useful when its structure is evaluated in the context of the overall retirement plan.
FAQ
What is retirement investment planning?
It is the process of determining how investments should support retirement income and long-term financial objectives.
Should retirees hold both taxable and retirement accounts?
Many retirees have multiple account types, but the appropriate structure depends on individual circumstances.
How does Social Security affect investment planning?
Social Security can reduce the amount of portfolio income needed and can influence withdrawal planning.
Should retirees change their investment strategy after retiring?
Retirement may warrant a review of the investment strategy, but changes should reflect individual goals, risk, liquidity, and income needs.
This material is for informational purposes only and does not constitute legal, tax, or investment advice. Please consult appropriate professionals before making decisions.
DISCLOSURES: The information provided in this letter is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy, or investment product, and should not be construed as investment, legal, or tax advice. Proffitt & Goodson, Inc. makes no warranties with regard to the information or results obtained by third parties and its use and disclaims any liability arising out of, or reliance on the information. The information is subject to change and, although based on information that Proffitt & Goodson, Inc. considers reliable, it is not guaranteed as to accuracy or completeness. Source information is obtained from independent financial data suppliers (Interactive Data Corporation, Morningstar, etc.). The Market Categories illustrated in this Financial Market Summary are indexes of specific equity, fixed income, or other categories. An index reflects the underlying securities in a particular selection of securities picked due to a particular type of investment. These indexes account for the reinvestment of dividends and other income but do not account for any transaction, custody, tax, or management fees encountered in real life. To that extent, these index numbers are artificial and cannot be duplicated in real life due to the necessity of paying those transaction, custody, tax, and management fees. Industry and specific sector returns (technology, utilities, etc.) do not account for the reinvestment of dividends or other income. Future events will cause these historical rates of return to be different in the future with the potential for loss as well as profit. Specific indexes may change their definition of particular security types included over time. These indexes reflect investments for a limited period of time and do not reflect performance in different economic or market cycles and are not intended to reflect the actual outcomes of any client of Proffitt & Goodson, Inc. Past performance does not guarantee future results.