As a fiduciary financial advisor in Delray Beach, Holland Capital helps you turn a portfolio built over a career into a dependable retirement paycheck: how much it can send you each year, which accounts the money should come from, what the withdrawals cost in tax, and how the investments are managed for that job.
For most of your working life, the portfolio had one assignment. Grow.
Now it has another one. The salary has stopped, or the last paycheck is getting close, and the money you spent decades putting away now has to pay you.
That changes the questions. How much can come out each month without leaving too little for later years? Should it come from the IRA, the brokerage account or the Roth? What will those withdrawals do to your tax return and to your Medicare premiums two years from now? And if the market has a bad year early in retirement, does the plan still hold?
You may already know what you own. What you need to know now is what it can reliably pay you, where that money should come from and how the portfolio should be managed once withdrawals begin.
What the Portfolio Can Pay You
We start with what retirement costs, not with the investments.
What does a normal year cost you? Which expenses disappear when work ends, and which ones begin or grow in retirement? Travel, help for children or grandchildren, a car every few years and health care all go on the list. Then we subtract what arrives without touching the portfolio: Social Security, a pension, rental income or anything else that shows up on its own.
What is left is the amount the portfolio has to provide.
That tells us how much work the portfolio is being asked to do. We also test the plan against a rough stretch in the markets during the first years of retirement, when you are taking money out at the same time the portfolio may be falling. Our guide to sequence of returns risk shows why a loss early in retirement can hurt more than the same loss later.
The answer is not one number you live with forever. It is a spending amount you can revisit as markets, taxes and your life change. That is at the center of our retirement planning work.
Which Account Sends the Check
Once you know how much the portfolio needs to provide, the next question is where the money comes from.
A withdrawal from a traditional IRA is ordinary income. Qualified Roth withdrawals owe no federal income tax. Selling shares in a brokerage account is taxed only on the gain, and possibly at a lower rate. How you blend those sources each year affects how much of the portfolio goes to the IRS and how much reaches you.
Required distributions from traditional IRAs start at age 73, or at 75 if you were born in 1960 or later. Until they do, you may have years where your taxable income is lower than it will be later, which can make it sensible to draw more from the IRA or convert some of it to a Roth. Higher income in any one year can also raise your Medicare premiums two years later.
We lay the withdrawals out one year at a time so you can see the tax cost before it arrives. Our guide to retirement withdrawal strategy goes further into how the order is chosen.
One Portfolio with One Job
Once we know what the portfolio needs to pay you and where the withdrawals should come from, the investments have a clear job.
We write that job into an investment policy statement. It spells out what the portfolio needs to provide, the amount of decline the plan can handle and the tax treatment of each account. The accounts are then managed together, with the goal of earning the highest return the plan allows after taxes and within its risk limits.
The accounts are managed as one portfolio, not as separate piles that each try to do everything. Where an investment sits can change what you keep, which is why asset location is part of the work.
Nothing is replaced just to make the portfolio look different. Positions you already own can stay when they still fit the plan, and any sale is considered along with its tax cost. From there, our investment management work keeps the portfolio aligned with the withdrawals it is meant to support.
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.
To begin, we need recent statements for each account, a Social Security statement for each of you, last year’s tax return and a rough idea of what you spend. You will see what the portfolio can pay, where the money should come from first and what we would leave alone.
Your CPA stays involved and sees the same withdrawal plan we do, so the tax return and the portfolio are working from one set of numbers.
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 Delray 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.
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
How Much Can I Take from My Portfolio Each Year?
There is no safe percentage that fits everyone. The answer depends on what you spend, what arrives from Social Security and any pension, how the money is invested, how many years it has to last and how much of each withdrawal goes to tax.
We work out a starting amount, test it against poor markets and a long life, and review it every year. In good years, the amount may rise. After a hard year, it may need to stay where it is or come down for a while.
Should We Convert Part of the IRA to a Roth Now That We Have Stopped Working?
Sometimes. The years between the last paycheck and required distributions can carry less taxable income than the years after. Converting part of a traditional IRA during that window means paying tax now at a known rate, so that less is forced out later.
It only makes sense if the tax on the conversion is lower than what you would likely pay later, and if you can pay it without shortchanging the spending plan. Our guide to Roth conversions covers that decision in more detail.
If I Spend More, Does My Fiduciary Financial Advisor Earn Less?
Yes, and you should know that. Our investment management fee is based on the assets we manage, so withdrawals can reduce what we are paid. That means our compensation can be affected by how much you take from the portfolio.
Holland Capital acts as a fiduciary when providing financial planning and investment advice. The spending amount comes from your plan, not from our fee, and if our advice would also change what we are paid, we tell you before you decide.
Can a Fiduciary Financial Advisor Outside Delray Beach Manage Our Retirement Income?
Yes. The work runs on statements, tax returns and the withdrawal plan, all of which we review together by video or phone. Once the plan is running, most years need only a few conversations.
For a conversation across the table, we can sit down by appointment at the Regus center at The Arbors, 1615 South Congress Avenue in Delray Beach.
Photo: Quintin Soloviev / Wikimedia Commons / CC BY 4.0, cropped.
