Retiring as a Millionaire Next Door in a Changing Economy

Many of today’s retirees are the wealthiest retirees of all time. Before the recent inflation numbers and market correction, there was a prolonged period of rising home values and strong market returns. You’re part of a generation of dedicated workers, meaning that there are more millionaires than ever. But, even if you have built a substantial nest egg, you may not feel like a millionaire and may be worried about how you’ll maintain your lifestyle in retirement and avoid running out of money in this new economic environment. Here’s what millionaires next door can ask themselves when planning for their retirement in a new financial landscape.

Do I Have Enough to Retire in Comfort?

Don’t know how much you need to save before you can retire? Start by figuring out how much money you’ll need year-to-year in retirement. List out your major expenses, think about if you’ll want to travel or pursue more leisure activities once you have unlimited free time, and start tracking your expenses. There’s no magic number you need to hit. Everyone’s income needs in retirement are different. It’s also important to have a strategy for not outliving your savings.

Where Will My Retirement Income Come From?

Social Security may not make up the bulk of your retirement income, but it can provide guaranteed income for the rest of your life. If you want to supplement your Social Security check and distributions from a 401(k) or IRA, you may consider an annuity. An annuity is an insurance-based financial product that accepts funds and then pays them back later in a stream of payments or a lump sum. An annuity can be thought of as the opposite of life insurance and help protect against outliving your money by providing guaranteed payments to you for life or a pre-determined amount of time.

How Much Will My Future Taxes Be?

While you may not think of taxes as a risk factor, the fact that they can be raised makes them a risk. This is especially true if you have a significant amount of money saved in a taxable account like a traditional 401(K) or IRA, own real estate, or want to pass on your wealth in a tax-efficient manner. Taxes may be relatively low right now compared to later in your retirement. Most of the provisions in the Tax Cuts and Jobs Act will expire at the end of 2025,[1] and the Biden administration has supported several tax-increasing measures on individuals. By taking advantage of current rates and working with a professional, you can create a long-term tax minimization strategy for retirement and adjust it as needed.

What Can I Do to Get on Track?

By the time we reach a certain point in our careers, we become experts. The same goes for parenthood if you have experience raising children or step-children. Practice makes perfect, and specialized knowledge can be invaluable. Just like you became a master of your trade, we’re a master of ours. We help guide people through the retirement process and create a plan that’s designed specifically for them.  Schedule your complimentary retirement readiness meeting to get started.

REGULATORY DISCLOSURE

Carmichael Hill & Associates, Inc. is a U.S. Securities and Exchange Commission Registered Investment Advisory firm. Registration does not imply that the SEC has endorsed or approved the qualifications of Carmichael Hill or its respective representatives to provide any advisory services. Advisor does not render or offer to render personalized investment advice or financial planning advice through this medium. Advice can only be given after:

  1. Delivery of a disclosure statement by advisor to client.
  2. Execution of our Investment Advisory Agreement between the client and the advisor.
  3. Initial payment of the planning fee or investment advisory fee by the client to the advisor.
  4. Advisor will not solicit or accept business in any state in which she or he is not properly registered or otherwise qualified to conduct business by virtue of a state “de minimis” exemption.
DISCLAIMERS

The information in this web site is based on data gathered from what the Advisor believes are reliable sources. It is not guaranteed as to accuracy, and does not purport to be complete and is not intended as the primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The identification of specific funds and model portfolios is being made on the assumption that the investor would participate in that investment or portfolio on a long-term basis and only after consulting with their investment advisor to determine their needs and tolerance for risk. With respect to any such identification, there can be no assurance that the fund or model portfolio will in fact perform in the manner suggested.

The results do not represent actual trading due to the timing of the clients’ trades and their trading costs. They may also not reflect the impact that material economic and market factors might have had on the advisor’s decision making if the advisor were managing the clients’ money. Investment and portfolio results may be different than the results the advisor’s discretionary clients achieve due to the timing of trades and the market conditions.

All references that might be made to an investment or portfolio’s performance are based on historical data and one should not assume that this performance will continue in the future.

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