As a fiduciary financial advisor in Boynton Beach, Holland Capital helps you plan the move from work to retirement: when each of you can stop, how you will cover the years in between, when Social Security should start and which accounts should pay the bills first. The investments are then managed to carry out that plan.
You are both still working. The retirement accounts have grown. You have some savings and a rough idea of when you would like to stop.
Now the questions have dates on them.
When does the first paycheck end? Does the other one keep coming for a while? Who carries the health insurance until Medicare? When should each of you claim Social Security? And once the paychecks stop, where does the money come from first?
For years, the job was to save. Now the job is to turn what you have saved into a retirement that works.
That is where we start.
The Move Out of Work Happens in Steps
Retirement is rarely one day on the calendar. It is a series of decisions, and each one changes the next.
The last few working years come first. Once you turn 50, the IRS allows larger catch-up contributions to a 401(k) and an IRA each year. Those years may also be the right time to pay off a loan or decide whether new savings should go into a Roth account.
Then comes the stop date. If it falls before 65, you will need to buy or arrange health insurance until Medicare begins. That cost belongs in the plan before you give notice. Our early retirement guide covers the years before 65 in more detail.
Social Security can start as early as 62 or as late as 70, and the monthly check rises each year you wait. Claiming later usually means drawing more from savings at first. For a couple, the two decisions need to be considered together. Our guide to Social Security strategies explains the trade-offs.
Then the paychecks stop, and the accounts have to start paying you. Which account pays the bills first, how much tax comes with each withdrawal and how much cash to keep on hand all become part of the same decision. The first-year action plan walks through those decisions in order.
Put the steps on one timeline and you can see whether the dates work together. Our retirement planning approach starts there.
When You Do Not Stop Working at the Same Time
You may not finish working on the same day.
One of you may be ready sooner. One job may carry the health insurance. One paycheck may be much larger than the other. Or one of you may simply want to keep working a little longer.
We put both timelines on the same plan. If one paycheck keeps coming, that may reduce what has to come from savings. Employer coverage may bridge some or all of the time to Medicare. The two Social Security claims can start at different ages.
The point is not to make both retirement dates match. It is to see what happens to the rest of the plan when either date changes.
The Investments Follow the Plan
Once the dates and spending are on paper, the portfolio has a defined job.
That job is set down in a written investment policy statement. It records what the savings must provide, when withdrawals are expected to begin, how much market risk the plan can bear and the tax status of each account. The portfolio is then managed to that policy for the best after-tax result at the level of risk the plan allows.
We begin with what you own today. An investment that still fits the plan can stay, and the tax cost of selling anything is part of the decision. While you are still working, your 401(k) stays in the employer’s plan, and we can suggest how to use the investments available there. Our investment management keeps the portfolio aligned with the plan as the retirement dates get closer.
Working with Holland Capital
Holland Capital Management is an independent registered investment adviser and a fiduciary. M. Chad Holland, CFA, CFP® works directly with clients and is responsible for the planning and advice.
For the first meeting, bring what you have: recent statements for the 401(k)s and other accounts, a Social Security statement for both of you and the retirement dates you have in mind, even if they are rough. We will put the pieces on the same timeline and show you which decisions need to be made first.
A CPA you already use stays involved and works from the same figures we do.
The first conversation is free. If there is work worth doing after that, we will define the scope and cost before you decide whether to move forward.
Our offices are in Charlotte, North Carolina and Winter Park, Florida. We work with clients in Boynton Beach primarily by video or phone. When an in-person meeting makes sense, we meet by appointment at the Regus center at The Arbors, 1615 South Congress Avenue in Delray Beach, about 15 minutes away.
For clients whose investments we manage, accounts are held directly at Charles Schwab in the client’s own name. Holland Capital manages the investments but does not take custody of client assets. If a client ever needs in-person assistance from Schwab, the closest branch is in Delray Beach at 520 Linton Boulevard.
We work with clients throughout Florida. You can see the other Florida communities we serve here.
Our what we do page explains how a planning engagement works.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Frequently Asked Questions
Should Our Investments Change as Retirement Gets Closer?
Not automatically. What changes is the job the money has to do. As withdrawals get closer, a market decline can affect more than the account balance because you may soon be taking money out to pay the bills.
The plan tests for that. If the current mix takes more risk than the plan allows, the investment policy changes with it. If the current portfolio fits, there is no reason to change it simply because retirement is closer. Our guide to sequence of returns risk explains why the order of returns counts once withdrawals begin.
What Should We Decide Before Either of Us Gives Notice?
Start with the decisions that affect everything else: when each paycheck stops, how health insurance will be covered until each of you reaches 65, when each of you might claim Social Security and where the first withdrawals will come from.
The 401(k) belongs on that list too. If you leave a job in or after the year you turn 55, withdrawals from that employer’s plan avoid the 10 percent early-withdrawal penalty, which can be a reason to leave some of the money in the plan for a while. The goal is to know how the first years fit together before either of you gives notice.
What Does a Fiduciary Financial Advisor Owe You When Retirement Is Close?
A fiduciary has to put your interests first in the advice. When you are deciding when to stop working, when to claim Social Security and what to do with a 401(k), that duty covers each of those recommendations, not just the investments.
Holland Capital acts as a fiduciary when providing financial planning and investment advice. Some advice can also raise what we are paid, such as rolling a 401(k) over to an account we manage once work ends. When it does, we say so before you decide.
Does Our Fiduciary Financial Advisor Have to Be in Boynton Beach?
No. Most of the planning is done by video or phone, which lets both of you join without arranging your workdays around a drive.
When it makes sense to meet in person, we can meet by appointment at the Regus center at The Arbors, 1615 South Congress Avenue in Delray Beach, about 15 minutes from Boynton Beach.
Photo: Andyxox / Wikimedia Commons / public domain, cropped.
