Make Your Second Act Better Than Your First

BY: Jeff Supple

An increasing number of Americans do not fit into the traditional mold of working until age 65, retiring, and collecting Social Security and withdrawals from their pensions/401(k)s/IRAs.

Following are a few individuals who might require something different than "conventional" retirement planning:

  • A business owner and serial entrepreneur in his early 50s who recently sold his business. He has a consulting contract with the purchaser for a couple of years, after which he hopes to identify and purchase a new business

  • A 55-year-old executive with a six-figure salary who wishes to take a less stressful job in a couple of years and work for another 10 years. She will always be working if she can, in some form or fashion, whether it be for pay or volunteering.

  • An attorney in his early 60s. He never plans on retiring, but wants some financial planning done, just in case.

Each is a prime example of someone who requires a plan for the next stage in his or her life (a.k.a. a second act). The aforementioned attorney was adamant that the word "retirement" not show up anywhere in his financial plan – to him, retirement is a place where people go to wait out the rest of their days. Many others value the social interaction and brain stimulation that work provides. The challenges that arise in planning for these individuals most often fall into the “good-problem-to-have” column, but they are still real.

Here are a few specific examples of how we may mitigate them:

  • We might accelerate a gifting strategy for someone who is working into their 70s and is in no danger of outliving their assets.

  • For someone who is working past 72, we might roll over their IRA into their 401(k), since required minimum distributions (RMDs) are waived for 401(k) plans (if you are not a 5%-or-more owner), but not IRAs. This would help keep taxable income down.

  • For the executive downsizing her career, we would implement a Roth-conversion strategy during her lower income years.

A second act should be as good as – if not better than! – the first. By working with us to develop a detailed financial plan, you'll go a long way toward ensuring that yours is. To discuss your second act and the steps you can take to get there, please send me an email or give me a call at (608) 849-2706, or reach out to any of our Wealth Management team members today.

Investment Products: Are Not FDIC Insured | Are Not Bank Guaranteed | May Lose Value


Jeff Supple

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