Retirement Perspective
Thank you for your interest in Wismer Wealth Management Group. With a myriad of investment advisors
and philosophies available to you, it becomes important to differentiate oneself when preparing clients for
the road ahead. Each person’s needs are unique. One size doesn’t fit all. Financial planning is an
integrated process that weaves together many threads. Individually they seem relatively unimpressive but
woven together produce a beautiful tapestry. Our objective is to maintain a high level of expertise to
integrate these threads into a cohesive financial plan for our clients.
Pre-retirement is filled with many such threads. Retirees get one opportunity to do it correctly. They’ll
need to make prudent decisions regarding company retirement plans. Should they roll their retirement
account to an IRA or leave it alone? Under what circumstances will the IRS require their employer to
withhold 20% in taxes? Do they know rule of 72(t) allows penalty-free withdrawals from retirement
accounts before age 59 ½ provided certain conditions are met? How will they determine the precise
amount of investment needed to retire comfortably? Using discounted cash flow analysis we can provide
the information necessary to transition successfully into retirement.
Already retired? Time is now working against them. They’re not building an asset base anymore, worse
yet they’re depleting it. They’ll likely need to adjust their investment plan to incorporate income and
preservation strategies now. Certain assets must still grow, however others must remain averse to risk
providing the income for to maintain their lifestyle. Determining which assets to earmark for growth and
which for income is an art in itself. What withdrawal rate will preserve their assets? Most people believe
they can withdraw far more than they can without depleting their account. We use a diversified model to
help build a portfolio specific to our client’s needs and time constraints.
Retirement requires certain expertise in tax issues as well. Once tax deferred accounts now must be taxed.
Required distributions must be calculated correctly to avoid the sting of a 50% IRS penalty for incorrect
distributions. How will part time work affect Social Security or the ability to contribute to an IRA? For
those with annuities, how will the exclusion ratio be calculated? This is a significant tax benefit exclusive
to the annuity yet is often overlooked when preparing a tax return.
What about health concerns? It is suggested that the largest expense a retiree will face in life is not a
mortgage or their home or children’s education but the expense needed to provide for health during their
golden years. How will they handle the proverbial long-term care issue? Will they ignore it or perhaps
allow their children to care for them? Do they have the time and resources to do that? Are there costeffective
alternatives? How do they sort through the maze of Social Security and Medicare information to
maximize their benefits?
Legacy is also of significance to their progeny. How will they pass your assets to heirs? Should they leave
their assets outright to children who might never have had experience managing large accounts? There are
means to protect a spendthrift child from himself by adding restrictive beneficiary designations to certain
assets. Will the use of a marital trust be beneficial? What tax benefits are available for philanthropy?
These are just a few of the many threads found in the retirement tapestry. Have you ever planted a seed
and forgotten to water it? There's more work to growing beautiful flowers than just dropping a seed in the
ground. When the ground is dry, we water it, when it's cold, we protect it, when malnourished we fertilize
it.
Some investors drop their investment seeds in the ground, and then forget about it. We believe it's what we
do after we plant the seed that matters. Here's the kind of service and maintenance you can expect from us.
Dave Wismer
August 2006
