As a fiduciary financial advisor in Winter Garden, Holland Capital helps you turn two careers’ worth of saving into a retirement date you can plan around. We work out what you will need, when you can stop and where each dollar should go between now and then, then manage the investments to match.
For a long time, retirement was a line on a benefits form. You picked a contribution rate, took the match and got back to work.
Then the numbers got bigger. Two paychecks, two 401(k)s, maybe an IRA from an earlier job, cash building up and a mortgage that may still be there when you start thinking seriously about retirement. Somewhere in your fifties, or a little before, the question changes. It stops being “are we saving?” and becomes “when can we stop, and what will we be able to spend?”
Nobody has usually answered that for you. The plan providers report balances. They do not tell you whether the balances add up to anything.
We start with the whole household: both incomes, both sets of accounts, the house, any children still at home and the years you have left to save. Then we work out what has to happen between now and the retirement date you are trying to reach.
When Retirement Stops Being Abstract
The first thing we look for is a date. Not a date you are locked into, but one you can test.
From there, the plan works backward. What would the two of you spend in a normal year once work ends? Which costs stay, which fall away and which arrive for the first time, such as health coverage before Medicare begins?
Then we look at what will pay for it. Two incomes usually mean two Social Security records, and the timing of each claim changes what the household receives for life. We look at Social Security timing for both of you together, not one at a time.
The rest has to come from savings. If the gap between spending and guaranteed income is large, the plan shows how much more you need to save, or how much later the date has to move. If it is smaller than you expected, it shows that too.
Those answers are the core of retirement planning. They tell you whether the next ten years of saving are on the right track.
Where Does the Next Dollar Go?
The 401(k)s are running. You are taking the full match. There is money left over most months.
So where should it go? A Roth or traditional contribution inside the plan, an IRA, a taxable brokerage account, extra on the mortgage, or savings for a child’s education?
There is no single answer for every household. Pre-tax money lowers your tax bill now and is taxed when it comes out. Roth money is taxed now and can come out tax-free later. A brokerage account is not tied to a retirement account’s rules. Paying extra on the mortgage can shrink what your retirement income eventually has to cover. The right destination depends on what the rest of your balance sheet already looks like.
Income can narrow some of those choices. IRA deductions and Roth IRA eligibility depend in part on household income, and the IRS income limits change over time. That is one reason we make the decision across the household instead of account by account.
We decide where the next dollar goes by working backward from the retirement you are trying to fund. The answer may be more retirement savings, taxable investments, the mortgage or more than one of them. The goal is to retire with enough money and enough flexibility that every withdrawal does not have to come from the same kind of account. We cover how that mix works in asset location.
Investing for the Date You Chose
When the plan shows what the money has to do and by when, the investment decisions follow from it.
We put that in writing as an investment policy statement. It spells out the spending the money must support, when that spending starts, the ups and downs the plan can tolerate and the tax treatment of each account. The portfolio is then run to that document for the most you can keep after tax without taking more risk than the plan needs.
Two 401(k)s can hold overlapping funds chosen years apart. Looked at together, the household may own more of one thing than anyone intended. We look at every account as one portfolio, and at which investments belong in which kind of account.
We start with what you already own. If the current investments fit the plan, they stay.
Our investment management follows the plan, not the other way around.
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.
If there are two of you, we want to hear from both. Couples often picture retirement differently, and the plan has to fit both versions.
Bring your latest statements and your most recent tax return if you have them. If you do not, we can start without them and fill in the details later.
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 Winter Garden primarily by video or phone. When an in-person meeting makes sense, we meet by appointment at the Regus center at 504 Plant Street in downtown Winter Garden.
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
What Does a Retirement Advisor Do That My 401(k) Provider Does Not?
The plan provider keeps the records and offers the funds. It sees one account.
A fiduciary financial advisor looks at everything you and your spouse own and asks when it can support you. That includes both workplace plans, IRAs, taxable savings, Social Security and the house. The advice covers when to stop, what to spend and which accounts to draw from, not only which funds to hold.
Can We Both Contribute to an IRA If One of Us Earns Much Less?
Usually, yes. If you file a joint return, each spouse can contribute to an IRA based on the couple’s combined earned income, up to the annual limit for each account. A spouse with little or no pay can still have an IRA funded in his or her own name.
Whether the contribution is deductible, or whether a Roth IRA is available, depends on your income and whether either of you is covered by a plan at work.
How Many Years Before Retirement Should We Start Planning?
Planning becomes more useful once retirement is close enough that you can make real choices about the date, your savings rate and which accounts you use.
Ten years gives you time to make meaningful changes, but there is no deadline for starting. If retirement is closer, the questions shift from how to accumulate the money to how the pieces will work together when the paychecks stop.
What Does Your Fiduciary Duty Mean for Where Our Savings Go?
Holland Capital acts as a fiduciary when providing financial planning and investment advice. For you, that covers the advice on how much to save, which accounts to use and when each of you should claim Social Security.
If a recommendation would also increase what we are paid, such as moving an old 401(k) or IRA into an account we manage, we tell you before you decide.
Does Our Fiduciary Financial Advisor Need to Be in Winter Garden?
No. Most of the planning happens by video or phone, with both of your accounts on the screen at once, and it fits around two work schedules. If you would rather sit down in person, we can meet by appointment at the Regus center at 504 Plant Street in downtown Winter Garden.
Photo: Freeholdman12 / Wikimedia Commons / CC BY 4.0, cropped.
