What Is Withdrawal Advice in Wealth Management?

    Without a thoughtful retirement spending plan, you may possibly outlive your assets or trigger unnecessary taxes. But with strategic counsel on when and how much to withdraw, and which accounts to pull from, you can create a plan with the goal to avoid common missteps and preserve more of what you’ve worked hard to build.

    Let’s look at the characteristics of withdrawal advice from investment management professionals at EP Wealth.

     

    Provide Lifetime Income

    Your withdrawal strategy should provide sustainable income for as long as needed without compromising your savings. To find that sweet spot, we compare your average spending rate and the rate your investments appreciate, accounting for inflation and cost-of-living adjustments to determine a sensible withdrawal schedule.

     

    Balance Today’s and Tomorrow’s Needs

    A well-designed withdrawal plan balances your current lifestyle desires and long-term financial security. To achieve this, we consider your age, life expectancy, health status, hobbies, and goals to determine how much income you need to retire comfortably.

    From there, we analyze your portfolio composition, including expected returns, to develop a retirement strategy that positions you for financial stability today and in the years ahead. We may sometimes rebalance your investments to manage returns while striving to move you closer to your monetary targets.

     

    Adjust for Unexpected Events

    As your needs change, your withdrawal strategy should evolve with you. Life transitions like a job change or health emergency impact your retirement income. EP Wealth Advisors helps you navigate these events, adjusting your withdrawal strategy to weather these unexpected financial shifts.

     

    Potentially Reduce Your Tax Burden

    Withdrawal advice might also potentially help minimize the tax burden on your distributions. You may possibly benefit from tax-advantaged investments, tax-loss harvesting to offset capital gains, and timed withdrawals in efforts for optimal tax efficiency. Managing Required Minimum Distributions (RMDs) under IRS guidelines also helps manage unnecessary excise taxes of up to 50% depending on when you time your withdrawal.

     

    Withdrawal Strategies

    Financial planning professionals implement a few common withdrawal strategies to help clients extend their lifetime income and have a comfortable retirement.

    • The 4% rule: The retiree withdraws 4% of their retirement balance the first year after retirement and takes the same dollar amount out each year, adjusting for inflation. While this approach provides steady, predictable income, it does not leave much room for major purchases or lifestyle changes.
    • Bucket strategy: The investor divides their retirement assets into three separate buckets with varying risks to fund short-term, mid-range, and long-term needs. The bucket strategy may be a good buffer against returns risk, but it is on the conservative side because it requires setting aside cash that could potentially be invested.
    • Dynamic withdrawal strategies: The retiree adjusts their spending based on market performance, withdrawing less in years when the market declines. Dynamic spending offers more flexibility than other strategies, provided the retiree stays within a predetermined spending “floor” and “ceiling.”

    Ultimately, there is no single approach to withdrawals that works for everyone. Your vision for the future probably looks a lot different than your neighbor’s, so one-size-fits-all retirement solutions won’t work. EP Wealth advisors spend time learning what matters most to you and what you want from your retirement—and design a withdrawal strategy to help make that happen.

     

    Who Needs Withdrawal Advice?

    You’ve done the hard part. You’ve been diligent about working and saving to build your nest egg. But how do you spend responsibly while enjoying the retirement you deserve? Withdrawal advice is ideal for anyone with questions about managing distributions in a way that provides for today and offers sustainable income for life. Connect online to discuss retirement planning with an EP Wealth advisor near you.

    DISCLOSURES:

    • EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability
    • Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
    • Hiring a qualified advisor and/or financial planner does not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied results or projections being represented here will be met or sustained.
    • The need for a financial advisor or financial planner and/or the type of services required are specific to the uniqueness of each individual’s circumstances. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC will satisfy your specific financial services requirements. Services offered by other advisors may align more to your specific needs.
    • Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
    • EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented. All expressions of option are subject to change without notice.
    • The content of this report is believed to be accurate as of the date of publication and cannot and does not accurately forecast future economic, market, or financial conditions; including changes to retirement benefits, social security, and/or Medicare. For this reason, any subsequent changes, and/or that occur after the publication of this presentation may cause the analysis encompassed herein to become inaccurate. Any references to future market or economic forecasts are based on hypothetical assumptions that may never come to pass.
    • All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
    • Please consult with a CPA, tax professional, and/or attorney regarding your specific situation before implementing any of the strategies referenced directly or indirectly herein.
    • Laws vary by state. The information presented herein is intended to be general in nature and may not apply to your state of domicile. Please consult local legal counsel to determine the best practices for your state.
    • The free financial health assessment referenced here is limited to, and can only be provided to, individuals with $500,000 or more in investable assets. The health assessment is limited to an initial call or meeting with an Investment Adviser Representative (IAR) of EP Wealth to discuss and assess your current financial situation and a subsequent follow-up meeting or call to share our thoughts. No additional services will be provided. EP Wealth Advisors’ obligation is limited to extending an offer to provide these services. It is the responsibility of the individual requesting the free health assessment to accept the service offered. No guarantee or warranty can be made that any of the information discussed or relayed in these meetings will be suitable or relevant. The free financial health assessment is limited in nature and is not intended to be regarded as an attempt to provide comprehensive financial advice.

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