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RETIREMENT PLANNING:

GENERATING RELIABLE INCOME

Do I have enough money to retire? Will I run out of money in retirement? When can I retire? Almost every retiree that walks through our doors ask the same questions. The answers, however can be very different for each client because each and every one of us has a unique situation and circumstances. You will not find “blanket recommendations” at Murphy Wealth Management. As you shift from the accumulation phase (building wealth) to the distribution phase (withdrawing from assets for retirement income), your strategy must transition as well.

Not choosing the right Medicare plan, incorrectly calculating when to elect Social Security, and withdrawing money from the wrong accounts for income can quickly turn into increased Medicare premiums, taxation of your Social Security and running out of money in retirement. Comprehensive retirement planning is vital for this phase of life. Our allegiance is to your path, and our job is to show you the options that can help you reach your goals. As fiduciaries, your interest is always placed above our own.

RISK MANAGEMENT:

CONSIDERING TAX AND OTHER RISKS

Most financial advisors only consider the accumulation and distribution of your assets. This type of strategizing excludes taxes which can erode your savings, and neglect the risks you face from inflation, increasing medical costs and the potential need for long-term care. And what about your legacy? Do you have an estate plan in place? At MWM, we understand how all the pieces of retirement work together and our IRS Enrolled Agent, insurance agent, and our in-house attorneys help ensure these major areas of import are addressed throughout our relationship.

We encourage our clients to dream big and don’t hold back. If it’s possible, we will create a plan to help you reach your most exciting goals. This is your future…trust your retirement planning to a team that is invested in your financial success and understands how it all works together. Our level of involvement depends on your personal preference and the complexity of your goals. Whether it is a simple 401(k) rollover or more sophisticated estate planning techniques like special trusts, we are equipped to handle almost any financial situation.

Every client's situation is unique.

We create a retirement plan that will reflect your needs and goals while being versatile enough to accommodate change. No one’s situation remains exactly the same throughout retirement, so it is important to be able to adapt to unexpected circumstances and sanity savers. Sanity savers are those must have spa days or that annual trip to play Troon in Scottsdale. We always strive to create realistic expectations and nothing is ever locked in stone.

HOW CAN WE HELP?

ONE CLIENT AT A TIME

401(k), 403(b), or 457 Plans

These are often the easiest plans to start investing in for retirement; they are accumulation vehicles that help you build wealth. These plans are typically set up by your employer and contributions are automatically taken pre-tax from your paycheck. Each plan has a contribution limit, but overall, these are fantastic to help you to start saving for retirement.
The thing that surprises some retirees later on is something you should address in your retirement plan, well in advance. Because the money held inside these accounts is tax qualified, meaning neither the principal nor interest has ever been taxed, unexpectedly high taxes could be due later, reducing your nest egg significantly. And whether you need the money or not, you must start taking money out of these plans every year starting at age 72. These are called RMDs, or Required Minimum Distributions.
Specific rules concerning withdrawals are very important in qualified plans. Distributing assets without understanding applicable tax laws can have a negative impact on your Medicare premiums, Social Security taxation and can unintentionally land you in a higher tax bracket. Consult a retirement tax professional and know the rules before you withdraw money or file for Social Security!
With 401(k) plans and similar accounts, investment options, fees and plan rules are chosen by your employer. Taking control and using a tax-free rollover into your own IRA (or smaller taxable rollovers into Roth IRAs) can be a very smart move as you get closer to retirement. That way you will have control over your choice of investment options and fees. In retirement, distributing and protecting wealth becomes a priority and your investment vehicle choices should reflect that change.

Traditional IRA

When you separate from your employer, or you reach a certain age, most employer retirement plans (401(k), 403(b), etc.) will allow you to rollover your account to your own IRA. A traditional IRA is a tax-deferred account subject to early withdrawal penalties under age 59.5 and annual RMDs starting at age 72.
So why consider a rollover? First, your IRA account will be in an investment vehicle of your choosing to reflect your changing needs. Second, lower fees, and a variety of investment choices like commodities or even real estate are major reasons to take control of your retirement funds. One of the most important features of owning an IRA is the ability to convert some or all of your funds into a Roth IRA. Please consult a retirement tax professional when considering whether or not a Roth IRA is right for your situation as they cannot be undone later.

Roth IRA

Depending on your financial situation and how close you are to needing income, a Roth IRA or Roth conversion can untether you from the US Government by eliminating future taxes on both principal and interest. Plus, NO RMDs! There are some different rules associated with Roth IRAs, like the five-year rule which mandates that the Roth account must be in existence for five years in order for you to withdraw principal at any age, and being at least 59.5 before withdrawal of any interest or gains without tax penalty.
Again, everyone’s situation is different so please consult a retirement tax professional when contemplating converting your traditional IRA to a Roth IRA. You have to pay the taxes up front, so creating a plan is vital to the success of the conversion. If you believe that tax rates may increase even 1% in the future, then considering a Roth conversion (or a series of them) could be a very good financial move.

Advisory Accounts

Exposure to investments can help your retirement account grow and distribute more income over the long-term. Based on your risk tolerance, income needs and tax situation, an investment model can be created and implemented to meet your goals. Utilizing a fully-managed advisory account takes the guesswork out of asset allocation and the time to manage all of your investments for a fixed percentage. At MWM, we charge no commissions on trades—we are a fee-based firm. These accounts bear risk and a thorough analysis and risk assessment is mandatory for ALL our advisory accounts.

Brokerage Accounts

Some investors prefer to monitor and trade their own retirement accounts. In this case, a brokerage account would be the preferable investment vehicle, and Murphy Wealth Management can help you navigate the tricky tax situations or provide overall investment advice for a fixed fee. Whichever option you prefer, consulting with professional money managers and tax professionals regarding your retirement can eliminate the uncertainties that inevitably surface throughout retirement. Our tax experts understand how to take advantage of the new laws to ensure more money is going into your pocket, than into Uncle Sam’s.

Annuities

Your retirement is already tax deferred, so why consider another tax deferred vehicle? Distribution. Annuities offer a wide range of distribution options that if properly structured, will provide a stream of income you can’t outlive. This is the top goal of most retirees, so an annuity can offer unmatched benefits. This is a commission-based product, so if you are presented with an annuity as a retirement solution, make certain you are asking the right questions and understand the fees, penalties, and possible restrictions. If you need near-term access to the bulk of principal…these may not the best choice for your specific situation. If you own an annuity and are not sure how it works, please contact our office for a review and explanation of the benefits and features.

Life Insurance

New permanent life insurance policies offer the chance for retirees to create tax-free retirement income and optional long-term care coverage if they need it (and a death benefit if they don’t.) Life insurance may be worth exploring at any age if you are in good health. Learn more about Life Insurance.

Portfolio Management / Investing

Fee-based, no commission portfolio and investment management services.

Retirement Plans for Business

Setup and management of 401(k) and similar retirement plans based on your firm’s structure.

Small Business Advisement

Tax planning, advisory services and more for your business.

Retirement Planning

Helping create lifetime retirement income that will last from accumulated assets.

Wealth Transfer

Insurance policies offset financial risk and offer multiple benefits and options.

Estate Planning

Our licensed attorney will formally draft your written plan for wealth transfer.

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Please call, email or text us to schedule an appointment. Text is available only to schedule an appointment.

e: info@mwmfinancial.tax
ph: (219) 510-5069
text: (219) 242-4073
fax: (844) 410-9363

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MWM Murphy Wealth Management

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