Auto Blog Demo

Category: Retirement Planning

  • Is Your Portfolio Really Aligned With Your Retirement Goals?

    Is Your Portfolio Really Aligned With Your Retirement Goals?

    People ask me this question all the time, “Raman, how do I know if my investments are still aligned with my retirement plan? Everything feels like it’s changing… the markets, taxes, interest rates…even my own comfort level with risk.”

    And that’s a great question. Because your investment allocation, how much you hold in stocks, bonds, and cash, isn’t meant to be set once and forgotten. It should evolve with your risk tolerance, your retirement timeline, and your life itself.

    And far too often I meet couples in Phoenix, Paradise Valley, or Tucson who haven’t re-evaluated their allocation in years. They’ve been through recessions, recoveries, and new tax laws, but their portfolios still look like they did when they were in their 40s. So what’s the problem? Well, that kind of static approach when you retire and start living off your portfolio can easily derail a retirement plan.

    Why Your “Comfort Level” With Risk Isn’t the Whole Story

    You see, risk tolerance is more than just how much market volatility you can emotionally handle, it’s also how much risk you can afford to take based on your financial stage. For example, I recently met a couple from Chandler who had built up close to $3 million across 401(k)s. They told me they were “moderate investors,” but when I reviewed their holdings, almost 90% of their portfolio was still in equities. Stock market has been doing phenomenal over the past couple of years and their equity exposure just ballooned because they never rebalanced their portfolio. They weren’t choosing to take more risk; the market had made that choice for them.

    And that’s exactly where a risk alignment review comes in. It’s about making sure your money is positioned intentionally, not accidentally.

    So, how do we position it intentionally? 

    Step 1: Match Your Allocation to Your Retirement Timeline

    Your retirement timeline dictates how much risk your portfolio can withstand.

    • 10+ years before retirement: You still need growth to outpace inflation. Equity exposure remains important, but it should be diversified across sectors and regions.
    • 5 years before retirement: This is where pre-retirees should start layering in stability — think bonds, cash reserves, or short-term fixed-income positions. It’s about reducing the odds that a bad market year forces you to sell investments at a loss.
    • In retirement: The focus shifts from accumulation to distribution. Your portfolio’s purpose now is to create consistent income without depleting principal too early. That means combining growth assets (to fight inflation) with lower-volatility holdings that fund near-term withdrawals.

    One of my clients in Tucson once said, “Raman, I finally understand…it’s not about avoiding risk; it’s about timing risk.” And she was exactly right. 

    Step 2: Stress-Test Your Portfolio for the Real World

    Here’s a simple truth: it’s easy to feel confident in your allocation when markets are calm. The real test comes during downturns. A stress test simulates what would happen to your retirement plan if markets dropped 20–30%. Would you still have enough liquidity for your next two years of living expenses? Would your income plan still work without selling investments at the wrong time?

    When I work with my clients across Scottsdale, Marana, and Surprise, I build these “what-if” scenarios using Right Capital. The goal isn’t to scare you,  it’s to make your plan bulletproof. If a portfolio can survive a recession, rising interest rates, and a tax hike, and STILL provide the lifestyle you want, that’s when you know you’re truly aligned.

    Step 3: Use Asset Location for Tax Efficiency

    Alignment isn’t just about risk,  it’s also about tax efficiency. A very common mistake I see is when retirees spread investments evenly across every account (IRAs, Roth IRAs, taxable accounts) without realizing that different assets belong in different tax “buckets”. So here’s the educational framework I often share as base foundation –

    • Tax-deferred accounts (IRA, 401(k)): Best for bond funds or REITs that generate ordinary income.
    • Taxable accounts: Great for index funds and ETFs that produce qualified dividends and long-term capital gains.
    • Roth accounts: Ideal for high-growth assets you want to keep tax-free in the future.

    That simple change, which is what call asset location, can increase after-tax returns without increasing risk. It’s a quiet, efficient way to stretch your wealth further, especially in high-tax years or before Required Minimum Distributions begin.

    Step 4: Rebalance Regularly, But Intentionally

    Market conditions change. Inflation rises, interest rates shift, and global events create ripple effects. If you haven’t rebalanced your portfolio lately, chances are your allocation no longer reflects your true plan. You see, rebalancing doesn’t mean constant trading, it means realigning your investments back to their intended targets. It helps you sell high, buy low, and control portfolio drift over time.

    And for many retirees in Phoenix and Paradise Valley, even a simple annual rebalance (or semi-annual during high volatility) can make the difference between a portfolio that stays stable and one that gradually skews too aggressive.

    Step 5: Align Emotionally and Mathematically

    The best allocation isn’t the one with the highest return, it’s the one you can stick with through every market cycle. If you lose sleep during downturns, it doesn’t matter how theoretically “optimal” your portfolio looks on paper. That emotional risk tolerance must be built into the design. And sometimes, the right move isn’t increasing returns, it’s reducing anxiety. Because when you stay disciplined, the math works in your favor over time.

    What This Means for Arizona Retirees

    Arizona is the home of retirees. From the golf communities of Scottsdale to the foothills of Marana, but they all face a unique mix of challenges: longer life expectancy, rising healthcare costs, and an unpredictable tax landscape.

    Your investment allocation has to account for all of that. It’s not just about asset growth, it’s about income sustainability, tax control, and peace of mind. And remember, what worked during your working years doesn’t always work in retirement.


    Markets evolve. So should your strategy. And your portfolio isn’t just a collection of investments, it’s the engine that fuels your next 30 years of life. Making sure your allocation aligns with your risk tolerance and retirement timeline means testing how it performs when things don’t go perfectly, and having a plan that adapts before you’re forced to react.

    If you’re in Arizona, whether you’re nearing retirement in Chandler, already retired in Scottsdale, or planning from Tucson or Paradise Valley,  it’s worth asking: “Is my portfolio built for growth, or is it built for my goals?”

    If you’re unsure, now’s the time to find out. You’ve built significant wealth but aren’t confident your investments match your risk tolerance or timeline, I invite you to take the next step.

    Raman Singh, CFP®

    Your Personalized CFO

    Relatable Articles

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind.

    This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material.

    Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses.

    Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted.

    Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute

  • What’s Your Retirement Backup Plan When The Markets Fall?

    What’s Your Retirement Backup Plan When The Markets Fall?

    Retirement isn’t just about enjoying the good years. It’s also about being ready for the unpredictable ones, the years when markets drop, inflation spikes, or the headlines feel a little too familiar. The truth is, downturns are inevitable.

    But here’s the thing, with the right backup plan, you can weather those market storms and still sleep well at night. Whether you’re living in Phoenix, near the golf courses of Scottsdale, or enjoying your home in Tucson, Chandler, or Paradise Valley, if you’re over 50 with more than $2 million saved, this question probably crosses your mind: “What if the market falls right after I retire?”

    So let’s talk about how to protect your retirement income with strategies that keep you confident, no matter what Wall Street does next.

    Step 1: Build a Cash and Cash Equivalent Buffer

    Start by keeping 1 to 3 years of your living expenses in cash, short-term bonds, or CDs. This is your breathing room when markets drop. It lets you avoid selling your investments at the wrong time. Think of it as your “sleep-well-at-night” fund. If your lifestyle costs $120,000 a year, set aside $120,000 to $360,000 in safe money. I often hear clients in Phoenix or Scottsdale say, “But Raman, I hate keeping that much cash, it’s just sitting there.” But here’s the thing, that money’s job isn’t to grow, it’s to protect. It’s what helps you stay calm while everyone else is panicking.

    Step 2: Use Guardrails for Spending

    When the market dips, you don’t need to panic, you just need to pivot a little. Cut back on discretionary spending like travel, upgrades, or big purchases by 10 to 20%. Keep essentials like housing, healthcare, and food covered by reliable income sources such as pensions or Social Security. Once markets recover, you simply ease back to your usual spending. 

    This flexibility can add years to your portfolio’s longevity. For example, if you live in Tucson and had plans for a luxury vacation, delaying it for one season could make a huge difference in keeping your plan on track. If you’ve read my article 5 Reasons You Should Consider Firing Your Advisor, you already know that a great advisor doesn’t just talk about investments. They help you build real spending guardrails that keep you protected in years like these.

    Step 3: Adjust Your Withdrawal Strategy

    Your withdrawal plan shouldn’t be rigid. It should move with you. That’s where the bucket approach comes in, keeping short-term money in cash and bonds, and long-term money in equities. You draw from safe assets when stocks are down and refill those buckets when markets recover. 

    Another smart move is to consider Roth conversions in down years. When account values drop, you pay less tax on the conversion and create future tax-free income. 

    And if you had planned a large withdrawal like a new car or home project, consider pausing that until your portfolio rebounds. In Chandler, I’ve seen retirees protect their wealth this way. A flexible withdrawal plan gives you control instead of reacting emotionally when the market dips.

    For more on the hidden costs of rigidity, see my piece Am I Paying Too Much in Advisor and Investment Fees? which explains how unnecessary fees and inflexible planning often hurt investors the most when volatility hits.

    Step 4: Tap Other Income Sources, If Available

    If markets stumble, you can always look beyond your portfolio for support. Some of my clients in Paradise Valley and Scottsdale do part-time consulting or project work, not because they have to, but because it keeps them sharp and reduces stress on their portfolio. 

    Some retirees use home equity through downsizing or a well-planned reverse mortgage. And if you own a rental property, that steady income can be your safety net when markets cool off. The point isn’t to replace your portfolio. It’s simply to give yourself options when times get rough.

    Step 5: Review Insurance and Risk Management

    If markets are down while costs are up, the right insurance coverage can save the day. Long-term care or hybrid policies can help protect against major healthcare surprises. A small fixed annuity might offer stable income if the market stays sluggish. And umbrella insurance can protect your assets from unexpected liability claims.

    In Phoenix and surrounding cities, healthcare costs keep rising each year. Reviewing your coverage and protection plan may not sound exciting, but it’s what keeps your financial foundation stable when everything else feels shaky.

    Step 6: Use Taxes as a Safety Net

    Taxes don’t just happen to you, they can be planned for. In down years, use tax-loss harvesting to offset future gains. If your income is lower because you’re drawing less from investments, it might be a perfect time to make a Roth conversion at a lower bracket. 

    You can also stay mindful of IRMAA thresholds to avoid unnecessary Medicare surcharges.

    For a deeper dive, check out my articles Taxes in Retirement: Which Benefits Are Taxable and Which Aren’t and Avoid These 5 Retirement Tax Traps in 2026 Before They Drain Your Nest Egg which explain how retirees can use smart timing to avoid letting taxes quietly eat away at their income.

    Now, let’s talk about something most people overlook

    How your advisor gets paid.

    When markets fall, many percentage-based advisors still make the same pitch: “Let’s buy this product to protect you.” But as a flat-fee fiduciary, my job isn’t to sell products. It’s to help you plan smarter. At Singh PWM, each retirement plan is stress-tested against recessions, inflation, and long bear markets. Cash-flow guardrails are built, tax strategies are coordinated, and every step is designed to prepare you for both good and challenging years, all for one transparent flat fee.

    If you’ve read Arizona Retirement Math: What a $2 Million Nest Egg Actually Gets You in Chandler, Paradise Valley, and Beyond, you already know that in Arizona, cost of living, taxes, and healthcare vary drastically by region. That’s why personalized planning matters more than ever.

    Downturns are going to happen. But with the right combination of cash reserves, flexible spending, smart tax planning, and a real strategy behind your investments, you’ll be ready. If you’re in Phoenix, Scottsdale, Tucson, or Chandler and want to know how your retirement plan would perform in a real downturn, schedule your free Retirement Stress-Test today. Let’s make sure your future stays on track, no matter what the market decides to do next.

    Raman Singh, CFP®

    Your Personalized CFO

    Relatable Articles

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind.

    This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material.

    Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses.

    Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted.

    Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute

    SEO Schema

    Primary Keywords: fiduciary financial advisor Phoenix, fee-only financial planner Scottsdale, flat-fee fiduciary advisor Tucson, fiduciary financial planner Chandler, Arizona fiduciary advisor
    Author: Raman Singh CFP®, Personalized CFO | Singh PWM
    Phoenix AZ | Scottsdale AZ | Tucson AZ | Chandler AZ | Paradise Valley AZ

  • Avoid These 5 Retirement Tax Traps in 2026 Before They Drain Your Nest Egg

    Avoid These 5 Retirement Tax Traps in 2026 Before They Drain Your Nest Egg

    Most retirees don’t realize how much they’re overpaying in taxes. Discover five hidden retirement tax traps and how to protect your income and lifestyle in 2026. Serving Phoenix, Scottsdale, Chandler, Tucson, and greater Arizona.

    Let’s Be Honest…

    You’ve worked your entire life, saved diligently, invested wisely, and now you finally get to enjoy it.  But then tax season hits and you ask yourself, “Why am I paying so much when I’m not even working anymore?”

    If that sounds familiar, you are not alone. Every week, I meet retirees across Phoenix, Scottsdale, Chandler, and Tucson who feel blindsided about how their income is taxed in retirement. The truth is, retirement taxes don’t work like paycheck taxes. You’re now in control, and how you pull money from your IRAs, Roth accounts, taxable investments, and Social Security determines how much you actually keep and how much Uncle Sam gets to keep. 

    So, let’s walk through five major retirement tax traps I see people fall into, but most importantly how you can avoid them in 2026.

    1. The Hidden Medicare Premium Tax – IRMAA

    Here’s the thing, most retirees don’t realize that Medicare premiums are income-based. The Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge on Medicare Part B and Part D premiums if your income exceeds certain thresholds. The Kiplinger article mentions, “IRMAA is a surcharge added to your Medicare Part B and Medicare Part D prescription drug coverage premiums if your income is above a certain level.” And for 2026, the base Part B premium is projected to be about $206.50 per month, and the surcharge begins if your 2024 Modified Adjusted Gross Income exceeds $107,000 (single) or $214,000 (joint). Higher-income retirees could pay more than $700 per month in total premiums.

    So here’s an example to put it in perspective –  A retired couple in Scottsdale sold a second home in 2024, triggering a large capital gain. The next year, their Medicare premiums jumped by over $3,000 because that one-time sale pushed them into a higher IRMAA bracket.

    And here’s what  you can do to avoid it – 

    • Plan large income events (like Roth conversions or property sales) over multiple years.
    • Monitor your MAGI (Modified Adjusted Gross Income), not just taxable income.
    • If your income has dropped, file Form SSA-44 to appeal your IRMAA tier.

    2. Missing the “Golden Window” for Roth Conversions

    Between the time you retire and the year you turn 73, when Required Minimum Distributions start, you have what I call your “Golden Window”. This window is your best opportunity to convert traditional IRA or 401(k) assets into Roth IRAs while your income and tax rate are temporarily lower. Once RMDs kick in, you lose that flexibility, and your tax bill can rise sharply. As Fidelity puts it pretty straightforward, “If you convert pre-tax IRA assets to a Roth IRA, you’ll owe taxes on the converted amount, but you won’t owe any taxes on qualified withdrawals in retirement.”

    I’ll tell you about my client based out of Chandler who had $2.5 million in pre-taxed savings and he waited until RMD age to take any action. And when RMDs started, his tax bracket jumped from 22% to 32%. If I had an opportunity to meet this client 10 years earlier, we would’ve started annual Roth conversions much earlier, and he could have reduced lifetime taxes and kept his Medicare premiums lower.

    And here’s what you can do to avoid those mistakes – 

    • Convert gradually each year to stay in a lower bracket.
    • Be mindful of IRMAA thresholds when converting.
    • Paying 22% tax now could save you 30%+ later.

    3. Taking Social Security Too Early

    It’s one of the most common questions I get – “Should I take Social Security at 62?” The answer isn’t just about the benefit amount; it’s also about tax timing. Up to 85% of your Social Security benefits can become taxable depending on your other income sources like IRA withdrawals or investments.

    I met a couple from Phoenix who took Social Security at 62 and they were withdrawing $90,000 from their IRAs. That year alone, most of their Social Security was taxed which increased their overall tax bracket. In their situation, if they had waited until 67, their benefit would have been about 30% higher, and they could have used the early years for Roth conversions instead.

    So how do you make sure you don’t end up making similar mistakes? 

    • Coordinate Social Security timing with your overall income plan.
    • Consider using taxable savings for the first few years of retirement.
    • Potentially delaying until age 70 can increase your monthly benefit by about 8% per year after full retirement age, while lowering lifetime taxes.

    4. Stacking Too Much Income in the Same Year

    Even smart investors get caught in this one. Selling investments, taking large IRA withdrawals, or doing Roth conversions all in the same calendar year can “stack” income and push you into a much higher tax bracket. The Wall Street Journal stated that, “Retirees often underestimate how capital gains, IRA distributions, and Social Security can combine to trigger higher tax and Medicare costs.”

    Not only that, I’ll tell you about a Paradise Valley retiree who sold $400,000 in stock and withdrew $120,000 from her IRA in the same year. Her taxable income jumped to over $500,000, moving her into the 32% bracket and costing an extra $25,000 in federal taxes. Only if she had spaced those transactions across two years, she would have paid roughly half that amount.

    So how do you avoid this mistake?

    • Split major transactions across different tax years.
    • Use tax-loss harvesting to offset gains.
    • Rebalance portfolios strategically in lower-income years.

    5. Leaving Heirs a Hidden Tax Bomb

    The SECURE Act 2.0 changed how inherited IRAs work. Most non-spouse beneficiaries now must empty inherited IRAs within 10 years, which can push your children into higher tax brackets if they’re still working. The IRS states plainly: “A beneficiary who is not the owner’s spouse generally must withdraw the entire account by the end of the 10th year following the year of the original owner’s death.”

    Here’s another example –  An Oro Valley client left a $1.2 million IRA to her two adult children. Each child was forced to withdraw about $60,000 per year, during their highest earning years. Nearly half of those withdrawals went straight to taxes.

    Here’s how you can fix this now – 

    • Convert some IRA assets to Roth now while your bracket is lower.
    • Leave a mix of taxable, Roth, and traditional assets to give heirs flexibility.
    • Coordinate your estate plan and tax plan together.

    What This Means for Arizona Retirees

    If you’re over 55 and living in Phoenix, Scottsdale, Chandler, or Tucson, you can control how your retirement is taxed, but only if you plan before 2026. Once the Tax Cuts and Jobs Act sunsets, today’s lower tax brackets could rise again.

    Tax planning in retirement isn’t something you do once a year. It’s something you build into your income strategy, year after year. The goal isn’t just to pay less tax, the goal is to make your money last longer and protect your lifestyle.

    That’s exactly why I created Singh PWM, a flat-fee fiduciary firm helping Arizona retirees align their investments, taxes, and estate goals without the 1% management fee or hidden incentives.

    No products. No commissions. Just better financial planning that helps your retirement work better.

    Ready to See How Much You Can Save?

    If you’ve ever wondered, “Am I doing this right?” You owe it to yourself to find out.  Schedule your free Retirement Tax Strategy Call today, and let’s see how much you could save before 2026 sneaks up on you.

    Together, we’ll map out a plan to reduce taxes, avoid IRMAA surprises, and build tax-free income that supports the lifestyle you’ve earned right here in Arizona.

    Raman Singh, CFP®

    Your Personalized CFO

    Related Reads from Singh PWM

    Sources & References

    • Kiplinger, “What Is the IRMAA?” – “IRMAA is a surcharge added to your Medicare Part B and Part D premiums if your income is above a certain level.”
    • Fidelity Viewpoints, “Why Convert to a Roth IRA Now?” – “If you convert pre-tax IRA assets to a Roth IRA, you’ll owe taxes on the converted amount — but you won’t owe any taxes on qualified withdrawals in retirement.”
    • The Wall Street Journal, “Capital Gains, IRAs, and the Surprising Tax Traps in Retirement.”
    • IRS Publication 590-B – “A non-spouse beneficiary generally must withdraw the entire account by the end of the 10th year following the year of the original owner’s death.”

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind.

    This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material.

    Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses.

    Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted.

    Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.

    Flat Fee Fiduciary Financial Advisor Arizona, Financial Planner Phoenix, Retirement Planning Scottsdale, Tax Planning Tucson, CFP Chandler, Transparent Flat Fee Financial Advisor, Fiduciary Advisor Arizona

  • Should I Consider an Annuity to Guarantee Retirement Income?

    Should I Consider an Annuity to Guarantee Retirement Income?

    Annuities can provide lifetime income but come with costs and tradeoffs. Learn the pros, cons, and alternatives from a flat-fee fiduciary advisor.

    Why So Many Retirees Ask About Annuities

    One of the most common questions I hear from people approaching retirement is “Should I buy an annuity to guarantee income?” And honestly, it’s a good question. Annuities are advertised everywhere, usually with phrases like “pension-like income” or “peace of mind for life.” On the surface, it sounds like the perfect solution, right? A steady paycheck for as long as you live. But like most things in financial planning, the reality is more complicated.

    Here’s the thing, annuities can actually do two things really well, though there’s always a cost. First, they can guarantee you lifetime income, which means you don’t have to worry about outliving your money no matter how long you live. Second, depending on the type of annuity, they can protect your principal, sometimes all of it, sometimes a portion of it, if the stock market takes a dive. So for someone who wants certainty, an annuity can feel like a safety net.

    The Hidden Costs and Trade-Offs

    But the catch is what you give up in exchange for that safety. Fees can run high, often 2% to 4% annually, and those costs quietly eat away at your wealth over time. Flexibility is limited too. Once you hand your money to the insurance company, it’s locked up, and getting it back isn’t easy.

    I’ve seen the dangers firsthand when annuities are mis-recommended. I once worked with a client who had 90% of her wealth tied up in a growth-oriented variable annuity. The problem was that it was in a non-retirement account. On paper, it looked good because the annuity doubled in value, but here’s the painful part. Every time she makes a withdrawal, she’s paying 100% ordinary income tax. That’s pushing her into a higher tax bracket, which means more of her money is going to the IRS than necessary. If instead she had simply invested in a regular taxable brokerage account, her growth could have been more cost-efficient, and withdrawals would likely have been taxed at long-term capital gains rates, which are much lower. That’s the kind of long-term tax trap that happens when an annuity is sold as a one-size-fits-all solution rather than planned in the context of someone’s entire financial picture. For a deeper dive into how to reduce these tax burdens in retirement, read my article Retirement Planning Without Taxes: Why It Costs So Much (and How to Fix It). It explains how poor withdrawal sequencing and lack of tax planning can quietly cost retirees six figures over time and how to fix it.

    When Annuities Might Make Sense

    So when do annuities make sense? If you want a guaranteed income floor beyond Social Security, they can provide it. If you’re extremely risk-averse and the thought of market volatility keeps you up at night, putting part of your nest egg into an annuity might give you peace of mind. And if you have more than enough assets, carving out a portion for guaranteed income probably won’t hurt your long-term growth.

    But they’re far from ideal in every case. If your Social Security and pension already cover your essential expenses, adding another annuity just ties up money you could use more flexibly. If you want liquidity, control, or the ability to pass money down efficiently, locking it away inside an annuity could create bigger problems down the road. And if someone is pitching it to you as an investment rather than what it actually is, an insurance product, be cautious.

    Alternatives to Buying an Annuity

    The good news is there are alternatives. You can build predictable retirement income without locking everything into an annuity. A bucket strategy can divide your money into short, mid, and long-term pools so you always know what’s safe to spend and what’s still growing. A bond ladder can stagger maturities to generate reliable cash flow year after year. Guardrail withdrawal strategies let you adjust spending based on how markets perform, which stretches your portfolio further. And careful, tax-smart withdrawals like sequencing money between taxable accounts, Roth IRAs, and traditional IRAs can help you keep more of your income after taxes. And if you’re wondering how much you can safely withdraw each year without running out of money, check out my related article Finding Your Safe Withdrawal Rate in Retirement. It explores how portfolio size, taxes, and market conditions all interact to determine a sustainable income plan and why the old “4% rule” doesn’t always fit today’s environment.

    The real problem isn’t annuities themselves. It’s how they’re sold. Too often they’re pushed because of commissions, not because they’re the right solution. That’s not fiduciary advice. As a flat-fee fiduciary, I don’t sell annuities and I don’t earn commissions if you buy one. My role is to evaluate them objectively, side by side with other income strategies, and ask whether they really solve your problem or if there’s a smarter, more tax-efficient way. Sometimes the answer is yes, they fit. But far more often, I find that lower-cost, more flexible approaches do the job better.

    At the end of the day, annuities can play a role in retirement income planning, but they are not a one-size-fits-all solution. The decision should always be made in the bigger context of taxes, estate planning, healthcare, and market risk.

    So should you consider an annuity? Maybe. But the more important question is whether an annuity solves your specific income challenge or whether it’s going to create a new problem later, like higher taxes or less flexibility. That clarity doesn’t come from a brochure or a sales pitch. It comes from a plan tailored to your life. And that’s exactly why I offer a Retirement Income Clarity Call so you can see whether an annuity really belongs in your plan or if there’s a smarter path forward.

    Schedule your free Retirement Tax Strategy Call today.

    Raman Singh, CFP®

    Your Personalized CFO

     

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind. This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses. Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted. Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.

  • Finding Your Safe Withdrawal Rate in Retirement

    Finding Your Safe Withdrawal Rate in Retirement

    Don’t risk running out of money. A flat-fee fiduciary explains how to set a safe withdrawal rate based on your portfolio, taxes, and retirement lifestyle.

    What Is an Appropriate Safe Withdrawal Rate for My Retirement?

    One of the biggest fears retirees face is running out of money. That’s why financial planners often talk about a “safe withdrawal rate.” This is the percentage of your portfolio you can withdraw each year in retirement without running out of funds too soon. But here’s the catch: there is no one-size-fits-all number. The right safe withdrawal rate depends on your portfolio size, lifespan, tax strategy, and spending needs. Let’s break it down.

    The Traditional 4% Rule

    You’ve probably heard of the 4% rule. This old guideline suggests you can withdraw 4% of your portfolio each year, adjusted for inflation, and your money should last 30 years. For example: A $2,000,000 portfolio, when applying a 4% rate, generates $80,000 per year. While this is a good starting point, it has limitations:

    • It assumes a fixed 30-year retirement, but what if you live longer?
    • It doesn’t factor in taxes or Medicare surcharges.
    • It assumes market returns that may not reflect today’s reality.

    Why Your Safe Withdrawal Rate Might Be Lower or Higher

    That number may sound straightforward, but the reality is much more nuanced. Several factors determine whether that $80,000 will truly sustain your lifestyle for decades:

    • Your lifespan and health – If longevity runs in your family, you may need to stretch your portfolio across 30 to 35+ years of retirement. That means your withdrawal rate has to account for the possibility of living longer than average.
    • Market conditions – Retiring at the start of a bear market can significantly stress-test your portfolio. Taking $80,000 during down years locks in losses, which can shorten the life of your nest egg unless your plan is flexible.
    • Tax efficiency – Not all $80,000 is created equal. If it comes primarily from pre-tax accounts, you could owe tens of thousands in taxes. Poor sequencing of withdrawals from taxable, tax-deferred, and Roth accounts can cost six figures over the course of retirement.
    • Flexibility in spending – Retirees who can adjust spending in response to market performance by cutting back in bad years and spending more in good years can often afford a higher overall withdrawal rate than someone with rigid expenses.
    • Guaranteed income sources – Pensions, annuities, and Social Security reduce the amount you actually need from your portfolio. For example, if those sources cover $40,000 of annual expenses, then only $40,000 would need to come from your investments, effectively lowering your withdrawal pressure.

    Why Tax Planning Changes the Math

    When most people talk about safe withdrawal rates, they tend to leave out one critical factor: taxes. That’s a costly oversight. Your gross withdrawal amount is not the same as the money that actually lands in your pocket after the IRS takes its share. Even more importantly, the order in which you draw from different account types – taxable, tax-deferred, and Roth can dramatically affect how long your money lasts.

    If you’d like a deeper look at how tax-efficient retirement planning strategies can help you keep more of your income, read my article: Retirement Planning Without Taxes: Why It Costs So Much (and How to Fix It). It explains how poor tax coordination can quietly drain six figures from your nest egg—and what proactive steps you can take to prevent that.

    Based on research, the way you structure withdrawals in retirement can significantly change the amount of after-tax income your portfolio produces.

    • Without tax planning: A $2 million portfolio might support withdrawals of about 3.5% per year ($70,000 gross). But after federal and state taxes, your net spendable income could be far lower.
    • With a tax-optimized strategy: Studies have shown that coordinating withdrawals across taxable, tax-deferred, and Roth accounts, along with strategies such as Roth conversions and tax-loss harvesting, can materially improve outcomes. In fact, the Journal of Financial Planning published research showing that tax-efficient distribution strategies can increase sustainable withdrawal rates by 0.5% to 1.0% or more, depending on account mix and tax brackets. On a $2 million portfolio, that translates to supporting closer to 4.5% withdrawals, or about $90,000 of income.

    That is potentially an extra $20,000 per year in available income achieved not by chasing higher investment returns but simply by using smarter, tax-efficient withdrawal sequencing.

    Sources:

    • “Tax-Efficient Retirement Withdrawal Planning Using a Comprehensive Tax Model,” Journal of Financial Planning (2012), Financial Planning Association.
    • TIAA Institute, “Withdrawal Strategies: A Tax-Smart Perspective” (2017).
    • Schwab Center for Financial Research, “Why Withdrawal Order Matters” (2020).

    A Smarter Way to Think About Withdrawals

    The traditional “safe withdrawal rate” often gets oversimplified into a single, fixed percentage like 4%. But retirement isn’t static. Your income needs, tax situation, and lifestyle evolve over time. Instead of clinging to one “magic” number, a smarter approach is to view withdrawals as a dynamic strategy that adapts with each stage of life:

    • Early Retirement (60s): This is when most retirees are healthiest, most active, and likely to spend more on travel, hobbies, or family experiences. Withdrawals may be higher during this period. It’s also a prime window for Roth conversions, which can raise taxable income temporarily but lower future taxes.
    • Mid Retirement (70s): Once Required Minimum Distributions (RMDs) begin, taxable income often increases, sometimes significantly. Coordinating withdrawals across taxable, tax-deferred, and Roth accounts becomes essential to avoid pushing yourself into higher tax brackets.
    • Late Retirement (80s+): Spending often slows down as lifestyles simplify, though healthcare and long-term care costs may rise. Withdrawal needs may be smaller overall, but the focus shifts to protecting against longevity risk and funding medical expenses.

    By adjusting your withdrawal rate as life unfolds, you not only create flexibility but also reduce the risk of outliving your savings. For example, Imagine a couple retiring at age 65 with a $2.5 million portfolio:

    • Years 65–70: They spend 5% annually to enjoy their most active years, while also converting part of their IRA to a Roth, accepting higher taxes now to lower future tax burden.
    • Years 70–80: They scale back to 3.5% withdrawals, supplementing with Roth assets when needed to smooth out taxes and maintain flexibility.
    • Years 80+: Their spending naturally declines, so withdrawals drop to 3%. The reduced withdrawals, combined with earlier tax planning, help preserve the portfolio through their 90s and beyond.

    The end result? They end up maximizing enjoyment in early retirement, reduce taxes in mid-retirement, and extend the longevity of their nest egg without being locked into one rigid number.

    The Flat-Fee Fiduciary Advantage

    Most traditional advisors charge around 1% of assets under management (AUM). That fee structure often comes with a narrow focus: managing investments. What gets overlooked? Withdrawal strategy and tax efficiency! These two factors that can be just as important as your portfolio’s returns in determining whether your money lasts.

    As a flat-fee fiduciary, Singh PWM takes a different approach. Instead of charging more as your portfolio grows, I provide one transparent annual fee that covers the full scope of planning:

    • Strategic investment management
    • Retirement withdrawal planning
    • Tax-efficient income strategies

    When clients partner with Singh PWM, the result is a coordinated plan designed around your lifespan, lifestyle, and spending goals, not big firm incentives.

    With the right withdrawal sequencing and tax planning, you keep more of what you’ve worked hard to build, while enjoying the confidence that your retirement income strategy is aligned with your future.

    The Bottom Line

    There isn’t a single “safe withdrawal rate” that works for everyone. The right number depends on your portfolio size, tax strategy, health and longevity, and lifestyle goals. The old 4% rule may serve as a starting point, but the smartest retirees know it’s not a rule, it’s a guideline. The real advantage comes from adjusting withdrawals dynamically and weaving in tax optimization.

    When done right, this approach doesn’t just stretch your portfolio further and it can add years of financial security to your retirement and keep six figures or more from being unnecessarily lost to the IRS.

    If you are ready to see how a tax-optimized withdrawal strategy could work for you? Schedule your free Retirement Tax Strategy Call today.

    Raman Singh, CFP®

    Your Personalized CFO

     

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind. This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses. Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted. Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.