PANEL THREE: MANAGING THE RETIREMENT PORTFOLIO
01.Core Concepts
AND DISTRIBUTIONS HARVESTING SEQUENCE • Order of liquidation of various types of accounts in the portfolio • Factors include • Penalties for early withdrawal • Taxes on the liquidation • Income based affect on Medicare premiums • Income affect on taxation of Social Security • RMDs • Estate planning • Step-up basis at death or Income in Respect of a Decedent (IRD) • Taxable step (up or down) to fair market value and have long-term holding periods • IRD assets receive no step (up or down) in basis MONITORING THE PLAN • Clients want guaranteed income PLUS flexibility and control • Financial planners will need some creativity to facilitate this • No one size fits all solutions • Roth IRAs could be used for unanticipated withdrawals (qualified withdrawals are tax and penalty free) • Financial planners should remain observant of new products • Planners should be staying on top of the industry developments • Portfolio and income projections were made on assumptions • Inevitably, they may be wrong • Annual (or more often) monitoring of the plan and meeting with the client are critical