You made it to retirement. Now the job is making it last.
Getting here was the hard part — or so everyone tells you. In practice, retirement tends to bring a different set of questions than saving ever did. Which account do you draw from first? What happens to your tax bill when nobody’s withholding for you anymore? What might required minimum distributions do to your bracket? And what if the market has a bad year right at the start?
At Scarborough Capital Management, we work with retirees across the country on exactly these questions. We’ve been doing it for over 35 years, and we aim to explain things in plain English.
WHAT’S ON YOUR MIND RIGHT NOW?
- Will my money last as long as I do?
- Which accounts should I draw from, and in what order?
- What are RMDs going to do to my tax bill?
- How much can I actually spend without worrying about it?
- What happens to my spouse if something happens to me?
- Am I paying more tax in retirement than I need to?
- Am I covered for what Medicare doesn’t pay for?
- Is everything set up the way I want it to pass on?
How We Help Retirees
RETIREMENT INCOME PLANNING
We help build the paycheck. Which accounts to draw from, in what order, at what rate — designed to help keep your income steady and your tax bill lower than it might otherwise be.
TAX-AWARE WITHDRAWALS
The years between retiring and the start of RMDs are often among the most flexible tax years you’ll have. We aim to use them well, whether that means partial Roth conversions, realizing gains at favorable rates, or simply sequencing withdrawals differently.
RMD PLANNING
Required minimum distributions generally begin at 73, or 75 depending on your birth year. We aim to plan for them well before they arrive, so they’re less likely to land as a surprise in a higher bracket.
SEQUENCE-OF-RETURNS PROTECTION
A poor market in your first few years of retirement can do more lasting damage than the same market later on. Your investment strategy is designed with that risk in mind.
SURVIVOR & LEGACY PLANNING
What your spouse would receive, what your heirs would receive, and how it’s structured. We follow estate planning best practices and can interface with your attorney and tax professional.
ONE DEDICATED ADVISOR
You have one advisor who knows your name and your situation, reachable by phone or email. Many of our advisors are CFP® or CRPC® professionals.
Frequently Asked Questions For Retirees
A traditional guideline is around 4% of your portfolio per year, adjusted annually for inflation. More conservative planners often suggest 3% to 3.5%, given longer life expectancies. But a single percentage generally isn’t a plan. Your number may depend on how much of your spending Social Security and any pension already cover, how your money is invested, your health, and how much flexibility you have to pull back in a difficult year. We’d rather build you the actual number than hand you a rule of thumb.
Arguably more than before. While you were working, the main task was generally saving consistently and staying invested. In retirement the tasks tend to multiply: deciding which accounts to draw from and in what order, managing taxes with no employer withholding, handling required minimum distributions, adjusting when markets fall, and helping make sure a surviving spouse is provided for.
None of that is impossible to do yourself. But the decisions can be less forgiving, because there’s generally less time and less earned income to recover from a mistake.
You generally have four options: leave it in the plan, move it to a new employer’s plan if you’re still working, roll it into an IRA, or cash it out. Cashing out is usually the costliest, because the full amount typically becomes taxable income in that year.
Rolling into an IRA is a common choice at retirement, often for the broader investment options, the consolidated view, and the ability to have it professionally managed. One disclosure worth making plainly: if you roll into an IRA we manage, we’re generally paid more than if you stay in a workplace plan under our subscription service. That’s a conflict of interest and we’d rather say so than not.
It depends on the account. Withdrawals from traditional 401(k)s and traditional IRAs are generally taxed as ordinary income. Roth withdrawals are typically tax-free if you’re over 59½ and the account has been open at least five years. In taxable brokerage accounts, you’re generally taxed on gains rather than the whole withdrawal, often at long-term capital gains rates for assets held more than a year.
Social Security is its own category — depending on your provisional income, up to 85% of your benefit may be taxable.
Because the accounts are treated so differently, the order you draw from them can change what you owe. That ordering is one of the more valuable pieces of retirement planning and one of the more commonly overlooked.
It generally depends on how the accounts are titled and who is named as beneficiary. A surviving spouse typically has options a non-spouse beneficiary doesn’t — including treating an inherited IRA as their own. Beneficiary designations generally override your will, which surprises people regularly.
The income side can change too. The household typically keeps the larger of the two Social Security benefits, not both, and the survivor often moves from married-filing-jointly to single tax brackets. Income can fall while the tax rate rises.
We aim to model this before it happens, because it’s usually easier to plan for than to react to.
Concerned enough to have planned for it, we’d suggest, rather than worried enough to lose sleep. Downturns are a normal feature of investing and there will be more of them.
What tends to matter is not being forced to sell at the bottom to cover living expenses. That’s why we aim to keep near-term spending needs in more stable assets and build withdrawal strategies that can flex when markets fall. The goal is that a difficult year is an inconvenience rather than a permanent change to your plan.
WHAT’S YOUR RISK NUMBER?
Most people have a rough sense of how much investment risk they’re comfortable with, and a portfolio that doesn’t quite match it. The gap usually only becomes obvious in a difficult market, which tends to be the worst time to find out.
This short questionnaire produces a risk number between 1 and 99 — a way of putting a figure on your comfort level. It takes about five minutes, and there’s no cost or obligation.
The questionnaire is provided by Nitrogen and opens in a new tab.
Let's talk about making it last.
Schedule a free, no-obligation 30-minute consultation. We’ll look at where your income is coming from, what it may be costing you in taxes, and whether your plan still fits the life you’re actually living.
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