Financial Advisor in Bradenton, FL

You probably know roughly what you have saved. The 401(k) website shows a balance. There is an IRA from a job you left in your forties. Social Security sends an estimate that changes with the age you claim.

None of them tells you how much you can take out each month once work stops.

Or when Social Security should start. Or what happens to your plan if the market drops the year after you retire.

Those three questions are tied together. Claim Social Security later and your savings carry more of the load for a few years, then less for the rest of your life. Take more out early and there is less left to recover from a bad market. Draw everything from the 401(k) and every dollar is taxed as income.

Holland Capital starts there. We work out what you spend, what Social Security and any other income will cover, and what your savings need to produce. Then we arrange the investments to deliver it.

Your Accounts Now Have to Replace a Paycheck

For thirty years the arrangement was simple. The paycheck paid the bills, and the 401(k) took a slice of it. Retirement turns that around. Accounts that only ever took money in now have to send it out, on a schedule, for as long as you live.

We begin with spending, because the balance alone cannot tell you what it will support. What does a normal month cost? What goes away when work stops, such as commuting and payroll taxes? What goes up, such as health coverage and travel? What comes around every few years: a car, a roof, help for a grown child?

Next come the checks that arrive without selling anything. Social Security. A small pension from an early job, if you have one. Rent from a property. The gap between those and your spending is the monthly amount your savings have to supply.

More than one in four Bradenton residents is 65 or older, according to Census Bureau estimates.

Then we test how large that monthly amount can be. It has to keep up with inflation, last through a long retirement and survive a few poor markets. It depends on how much of your spending Social Security covers, how long you and your spouse may live, and how much you could cut back in a bad year if you had to. We go further into that math in our retirement income planning guide.

Florida does not tax 401(k) withdrawals or Social Security. Federal income tax still applies, so the account you draw from each year changes what you keep. That is part of retirement planning too.

Deciding When Social Security Starts

You can claim as early as 62. Your full benefit arrives at your full retirement age, which is 67 if you were born in 1960 or later. Claiming at 62 reduces that full benefit by up to 30 percent, permanently. Each year you wait past full retirement age, up to 70, adds 8 percent to the monthly check for life.

For a married couple, it is really two decisions. When one spouse dies, the survivor keeps the larger of the two benefits. So the higher earner’s claiming age affects both of your lives.

Waiting is not automatically the right answer. If you stop working at 63 and hold off until 70, your savings pay the whole bill for seven years. Some people need Social Security sooner. Some would rather spend more while they are healthy and active. We show what each claiming age does to your savings, year by year, so you choose with the trade-off in front of you. Our guide to Social Security timing covers the rules in more detail.

When a Parent’s Estate Comes to You

A parent dies, and within a few weeks the mail starts arriving. A letter from the IRA custodian. A statement from a brokerage firm you have never used. The deed to a house in Florida. A copy of the trust or the will. Each one needs a decision, and none of them explains how it relates to the others.

The first job is an inventory. What did your parent own, and how was each piece held? Accounts with a named beneficiary pass straight to that person. Anything in a trust follows the trust. Everything else goes through the estate, and the attorney or personal representative handles that process. Our part is the financial decisions that follow.

An inherited IRA comes with its own clock. Most adult children who inherit one have to empty it by the end of the tenth year after the year of death. If your parent had already started required distributions, you generally have to take one each year along the way. How you spread those withdrawals across the ten years can change the tax bill a great deal, especially while you are still working. The inherited IRA rules are laid out in more detail in our guide.

Stocks, funds and real estate held outside a retirement account are treated differently. Your cost basis is generally reset to their value at the date of death, so selling soon afterward often produces little taxable gain. The house is its own decision. Your parent’s homestead exemption does not pass to you, and the property is reassessed at market value the following year, so keeping it usually means a higher tax bill than your parent paid.

The sequence changes the result. Sell the house before you know what you need and you may give up rental income you would have wanted. Take the whole IRA in one year and a large share can go to tax. We help you see what you now own, which decisions have a deadline and which can wait, and how the inheritance fits your own retirement plan. Our guide to handling an inheritance covers the broader steps.

Building the Portfolio Around the Paycheck

Once the monthly amount is known, the portfolio has a specific job. Some money has to be ready for the next few years of withdrawals. The rest can stay invested for growth, because it will not be needed for a long time.

That split is what protects you if the market falls the year after you retire. With the next several years of income already set aside, you are not forced to sell investments at a low point to pay the bills. The idea is covered in our guide to sequence of returns risk.

The account you draw from changes the tax result. Money from a 401(k) or traditional IRA is taxed as income. Money from a Roth generally is not. Selling from a taxable account taxes only the gain.

The 401(k) you already have may be low in cost and well suited to paying income. The IRA may hold funds you picked years ago for a different purpose. We look at each holding in the context of the job the portfolio now has to do: provide money to live on today while keeping enough invested for the years ahead. The monthly plan is carried out through investment management.

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.

Most people arrive at the first meeting with a Social Security estimate and a recent 401(k) statement. We can begin with that and fill in the rest together.

From there, our planning process, Retirement Engineering™, turns those pieces into a monthly income, a claiming age and a withdrawal order. If you have inherited accounts or property, they go into the same plan.

Your CPA and attorney stay involved. When a withdrawal affects your tax return, or an inheritance requires a decision from the estate attorney, we coordinate the financial side with them.

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 Florida office is in Winter Park. If you are looking for a financial advisor in Bradenton, we can work together without your adviser being down the street. Most meetings are by video or phone. When it makes sense to sit down together, we can meet by appointment at Connect Central, 1201 6th Avenue West in downtown Bradenton. Holland Capital does not maintain a branch office in Bradenton.

We work with clients throughout Florida. You can see the other Florida communities we serve here.

Engagements, and how they are set up, are described on our what we do page.

Frequently Asked Questions

Photo: Ebyabe / Wikimedia Commons / CC BY-SA 3.0, cropped.