Retirement Planning in Columbus: Expert Tips and Strategies

Benjamin Franklin famously said, “You may delay, but time will not.” His quote is a sober reminder of the high price that procrastination can impose on us.

Whether busy working or already retired, it’s not uncommon for many to put off important financial and retirement planning. But before we know it, months or years have passed, and we say, “Where has the time gone?”

Many admit they procrastinate because managing investments, taxes, and estate planning can be overwhelming due to constant change and complexity.

At Patriot Asset Advisors, we understand your concerns. With over 55 years of combined experience, our fiduciary CFP® and tax planning professionals specialize in wealth management solutions that fit today’s complex market environment. We provide personalized, high-touch, fiduciary-focused retirement planning for Columbus, Ohio residents. 

In this guide, we’ll explore six key considerations for your wealth management and offer expert tips and strategies. These insights will clarify important financial topics that can help you pursue a comfortable retirement.

Chapter 1

Maximizing Your 401(k) and IRA: Smart Tips for Columbus Retirees

For many retired people, one of their largest financial assets is their employer-sponsored retirement plan, like a 401(k). Contributions to a 401(k) are made pre-taxes, and the investment growth is tax-deferred until you withdraw the funds in retirement.

Many employers offer matching contributions to your 401(k) plan, essentially free money. To maximize this, contribute enough to get the entire match. This is one of the easiest ways to boost your retirement savings.

Another tip is to take advantage of IRA contributions. First, let's look at the benefits of Roth and Traditional IRA contributions:

  • Roth IRA: Contributions are made with after-tax dollars, allowing for tax-free withdrawals in retirement. This can be advantageous if you anticipate being in a higher tax bracket. For 2024, the maximum contribution limit is $6,500.
  • Traditional IRA: Contributions could be tax-deductible, reducing your taxable income. Taxes are deferred until you withdraw the funds, which can be beneficial if you're in a lower tax bracket during retirement. For 2024, the maximum contribution limit is $6,500.

Deciding between a Roth and a Traditional IRA might depend on your current tax situation, expected future income, and personal preferences.

If you're 50 or older, you can make catch-up contributions to 401(k) and IRA accounts.

This allows you to save additional funds beyond the standard contribution limits, offering a valuable opportunity to boost your retirement nest egg.

The catch-up contribution limit for 401(k)s is $7,500 in 2024. In 2025, it will increase to $10,000, or 150% of the standard catch-up amount for people aged 60 to 63.

For IRAs, the catch-up contribution limit of $1,000 will be indexed for inflation in 2024 and after that. This means it could increase annually based on cost-of-living adjustments.

Retirement savings plans like 401(k)s and IRAs offer significant tax advantages. Contributing the maximum allowed each year can significantly enhance your retirement savings.

At Patriot, our Certified Financial Planners in Columbus, Ohio, can evaluate your retirement plan using our Retirement Readiness survey. We will help you identify ways to maximize your employer-sponsored plan and IRAs, including determining whether a Roth IRA conversion makes sense for your financial situation.

Chapter 2

Recession-Proof Your Retirement Plan: The Power of Diversification

Economic downturns are inevitable. While it's not likely to predict precisely how the markets will react in the short term, steps can be taken to mitigate the impact on your retirement savings. Diversification is a cornerstone strategy, especially during volatile markets.

Diversification involves spreading your investments across various asset classes with uncorrelated returns. This means that when one asset class experiences a decline, others may perform well, potentially offsetting those losses. Here are a few ways to diversify:

  • Multiple asset classes: Consider incorporating asset classes like stocks, bonds, real estate, and commodities into your portfolio. Each asset class has its risk-return profile, and combining them can help manage overall portfolio volatility.
  • Utilizing multiple managers: Diversifying your portfolio across different investment managers can also prove beneficial. Other managers have varying investment styles and philosophies, which could help reduce concentration risk within a single asset class.

Tactical Allocation for Enhanced Flexibility

While strategic asset allocation focuses on your long-term investment mix, tactical allocation allows for more dynamic adjustments based on market conditions. This strategy could involve temporarily shifting your portfolio's weightings to capitalize on short-term opportunities or mitigate risks during periods of anticipated market volatility.

It's important to note that tactical allocation requires constant monitoring and expertise, so it's advisable to consult with Patriot's fiduciary in Columbus, Ohio.

Chapter 3

Understanding Social Security Benefits: Smart Retirement Planning Strategies

Social Security provides a critical financial safety net for many retirees. It provides monthly benefits based on your lifetime earnings and when you claim them. Optimizing your Social Security claiming strategy can significantly impact your overall retirement income.

The Social Security Administration (SSA) determines your benefits based on your average indexed earnings over your 35 highest-earning years. Understanding how your earnings history translates into potential benefits is an essential first step. The SSA offers online tools to estimate your projected benefits.

Strategic Claiming Decisions

You can start collecting Social Security benefits at 62, which permanently reduces your monthly payment. For most, full retirement age (FRA) between 65 and 67, depending on birth year, offers the highest benefit. Delaying benefits past FRA can further increase your monthly payout.

Consider these factors when deciding when to claim:

  • Life expectancy: If you have a family history of longevity, delaying benefits could be advantageous, as you'll receive a higher monthly payment for a longer lifespan.
  • Retirement income needs: If you have a significant amount saved outside of Social Security, you have more flexibility to consider claiming benefits either earlier or later.
  • Health status: If you have health concerns that may shorten your lifespan, claiming benefits earlier could ensure you receive a greater total benefit amount.

There's no single "best" time to claim Social Security. The optimal strategy depends on your circumstances.

While Social Security is a valuable source of income, it's unlikely to replace your pre-retirement earnings fully. Integrating your Social Security benefits with your other retirement savings, such as pensions, 401(k)s, and IRAs, is essential for a comfortable retirement.

One of Patriot's financial advisors in Columbus can help you analyze your situation and project how different claiming strategies may impact your retirement income picture.

Chapter 4

Why Tax Planning is Key to a Comfortable Retirement

Taxes can take a significant bite out of your retirement income, adding unnecessary stress. Strategic tax planning throughout retirement can increase your disposable income and strengthen your financial situation.

There are various investment tools and strategies that can enhance your tax efficiency:

  • Tax-lot accounting: Tracking your investments' purchase price and sale date allows for strategic selling to minimize your capital gains taxes. Selling investments held for longer than one year typically results in lower capital gains tax rates than short-term holdings.
  • Loss harvesting: Selling investments at a loss can offset capital gains from other investments, potentially reducing your overall tax liability.
  • Wider rebalancing ranges: Traditional portfolio rebalancing involves buying and selling assets to maintain your target asset allocation. Using wider rebalancing ranges can help minimize taxable transactions.
  • Tax-aware trading: To optimize after-tax returns, consider the timing and location of investments, such as choosing tax-efficient accounts and strategically realizing gains and losses.

Combining these tax-planning strategies allows you to keep more of your hard-earned retirement savings.

Working with Patriot's tax planning professionals can help you develop a tax-efficient retirement plan tailored to your unique circumstances.

Chapter 5

Retirement Income Planning: Have You Saved Enough?

The success of your golden years often hinges on having enough savings to cover your living expenses. Assessing your retirement readiness and creating a sustainable income stream are crucial steps in planning a comfortable retirement.

There's no one-size-fits-all answer to whether you've saved enough. Your retirement needs will depend on various factors, including:

  • Desired lifestyle: Do you envision an active retirement filled with travel and hobbies or a more modest lifestyle focused on spending time with family? The cost of living for your desired lifestyle will affect how much income you need for retirement.
  • Current assets and income: Taking stock of your current assets, including retirement savings, pensions, Social Security benefits, and any additional income sources, will provide a starting point for your retirement planning.
  • Liabilities: Outstanding debts like mortgages, business or student loans can impact your disposable income in retirement.
  • Savings rate: Evaluating your current savings rate and your ability to increase it over time is essential to bridge any gaps in your retirement savings.
  • Rate of return: Projecting a realistic rate of return on your investments will influence how much you need to save to reach your retirement goals.
  • Age of retirement: The earlier you retire, the longer your retirement savings must last. Conversely, delaying retirement allows more time to save and your investments to grow.

While the numbers are important, retirement planning isn't just about the amount saved. A comprehensive plan should also consider factors like healthcare costs, potential long-term care needs, and inflation, which can erode your purchasing power over time.

For a nominal fee, Patriot Asset Advisors offers comprehensive planning that includes a detailed analysis of your financial situation, providing you with clear options and actionable steps for your retirement plan.

Chapter 6

Estate Planning and Wealth Transfer: Securing Your Legacy

Planning for retirement should certainly be a primary focus, but what happens to your assets after you're gone? Without a proper estate plan, the state's inheritance laws will dictate how your assets are distributed. This may not match your wishes and could have unintended consequences on your beneficiaries.

A well-crafted estate plan provides clarity and peace of mind, knowing your wishes will be respected. Here are some important considerations:

Beneficiary designations: Many retirement accounts and life insurance policies allow you to designate beneficiaries. Keeping these designations up-to-date ensures the intended recipients receive these assets after your passing.

Wills: A will is a legal document outlining how to distribute your assets after death. In Ohio, even with a will, assets must go through probate court, which can be time-consuming and subject to court fees.

Power of attorney: This document allows you to designate someone to manage your financial affairs if you become incapacitated.

Healthcare directives: Creating advanced directives ensures your medical preferences are honored if you cannot.

TOD: A Transfer on Death (TOD) designation lets brokerage account assets bypass probate and go straight to your beneficiaries. It's a simple and efficient way to distribute assets, avoiding the time and costs of probate.

Beyond the Basics

While wills and power of attorney are crucial elements, estate planning can encompass more complex strategies such as:

  • Living trusts: Establishing a living trust can help manage your assets during your lifetime and distribute them efficiently after your death, bypassing the probate process.
  • Charitable giving: Incorporating charitable trusts or donations can fulfill philanthropic goals while providing potential tax benefits.
  • Business succession planning: For business owners, estate planning strategies can ensure a smooth transition of ownership and operations after your passing.

Estate planning allows you to take control of your legacy, minimizes the burden on your loved ones, and leaves a lasting impact on those who matter most.

At Patriot Asset Advisors, we work with several estate planning attorneys. We can connect you with them to create a comprehensive estate plan.

Why Choose Patriot Asset Advisors for Retirement Planning in Columbus, Ohio?

Patriot Asset Advisors is a wealth management firm in Columbus specializing in retirement planning for individuals with investable assets of $400,000 or more.  

Our team comprises Certified Financial Planners (CFP®) who adhere to a fiduciary standard. This means we have a legal obligation to act in your best interests ahead of our own. Our recommendations are based on your needs and are not influenced by commissions or product sales quotas.

We strive to build long-term relationships with our clients based on trust, transparency, and objective advice. Our financial professionals will take the time to understand your financial situation, risk tolerance, and retirement goals. Through open communication and collaboration, we develop a customized retirement plan.

Our relationship with our clients does not end after the initial retirement plan is created. We are committed to ongoing support and guidance as your financial needs evolve.

Beyond retirement planning, we offer comprehensive wealth management services, including investment, tax, and estate planning guidance. This allows us to provide a holistic approach to your financial well-being.

Our team has extensive experience in retirement planning and a deep understanding of the financial markets. We constantly stay updated on industry trends, regulations, and strategies to provide the most up-to-date and informed advice.

We believe in empowering our clients with knowledge. Our website offers a wealth of tips and strategies on various topics through the following resources:

  • Blog: Here, you'll find our personal and business financial articles library.
  • Special reports: Keep current on what's happening in the market.
  • Podcast: Hosts Allen Stocker and Jonathan Taylor share a commonsense approach to retirement savings with listeners.
  • Videos: Watch Allen and Jonathan provide updates on the latest financial topics.

We understand that navigating retirement planning can feel overwhelming. At Patriot Asset Advisors, we're committed to partnering with you on your retirement journey.

Contact us today to schedule your complimentary consultation, or call us at (614) 944-5225, and we'll answer any questions you may have.