Nearly Retired

Funding your retirement

When you retire, your paycheck stops. It’s up to you to determine the best method to generate the cash flow needed to fund your lifestyle during retirement. You will rely on three possible sources of funds:

Pensions Provides the basis of your retirement plan
Social Security
Invested Assets Fund remaining cash-flow needs

When saving for retirement, your investment strategy is focused on accumulating assets. Once you retire, the focus turns to generating an income from your investments. Implementing a well thought out investment income plan is a fundamental part of transitioning to retirement.

In addition to needing income, there are many other critical items to consider upon retirement. Your chances of having serious health issues is increased, and it's important that you fully understand your health care options. You need to have an up to date estate plan. In addition to identifying who will inherit your assets, a well drafted estate plan will address the possibility of your becoming disabled or having a serious medical issue.

Blue Chip Partners can help you transition through retirement. Our advisory team has extensive experience in the practice of law, tax, investments and insurance. Our background is extraordinarily beneficial in helping you make fully informed retirement decisions.

Retirement Questions

Which pension option is best?

If you are fortunate enough to have accrued a pension, you will have to make a pension distribution election when you retire. There are a number of factors that must be balanced when making a pension election. General descriptions of options:


  • Monthly pension continues for your life
  • No benefit paid to any survivor

Joint and survivor

  • Lower initial payments than the life-only
  • Includes a payment to surviving spouse


  • Payments continue for the longer of your life or term certain period
When should I start drawing Social Security?

Deciding when to begin drawing Social Security is one of the most important decisions that you will make. If you decide to draw your benefit at age 62, you will receive approximately 30% less per month than if you wait until age 66. If you are able to postpone drawing your benefit until age 70, you will receive 32% more than if you began at 66.

There are a number of little known opportunities that married couples may be able to use to maximize their benefits. For example, it may be in your interest to draw a benefit based upon your spouse’s benefit, while delaying drawing on your own until 70.

It is important to fully understand the various options prior to making a decision to begin drawing Social Security benefits.

How will I fund my needs during retirement?

With interest rates at all time lows, an investment strategy of simply going to the bank and putting your funds in CDs is no longer a realistic approach. You need an investment income plan focusing on generating income without forgetting about taxes.

Your investment assets will generally include:

Asset type Description What is taxable?
Retirement Funds IRAs, 401(k)s Entire distribution typically taxable; at age 70 1/2 government requires you begin taking distributions.
Roth IRAs Generally nontaxable provided over age 59 1/2 and in existence for > 5 years. There is no mandatory distribution required at age 70 1/2.
Non-retirement accounts May be titled individually, jointly with another person, or in name of your living trust. Depends on asset generating distribution; If cash is spent, there is no income tax; if asset that has gained in value is sold, tax is due on gain; dividends & interest generally taxable.

Your investment income plan needs to focus on both the investment choices and the impact of taxes. By fully considering the tax impact of various investment decisions, the probability of your funds lasting through retirement increases.