It’s hard to believe that a whole year has gone by since Retirement Income Visions™ initial blog post, but it has! This marks Retirement Income Visions™ 52nd post since it debuted on August 16, 2009 as a weekly blog, with new posts published each Monday morning.
As stated in the initial post, Retirement Income Visions™ Makes Its Debut, the blog, and the associated importance of retirement income planning as a separate and distinct niche, was inspired and motivated by my clients’ experience during the October, 2007 – March, 2009 stock market decline.
Also, as stated in the initial post, my goal in writing Retirement Income Visions™ was, and still is, to bring to your attention innovative planning strategies that you can use to create and optimize your retirement income, and, in many cases, reduce your exposure to adverse financial market conditions. If reader feedback, Twitter followers, and media attention, including a May 15th quote by The Wall Street Journal as the result of the timely publishing of the May 10th post, Be on the Lookout for Roth IRA Conversion Opportunities, is any indication, it appears that I’m off to a great start in achieving this goal.
I’ve covered a broad spectrum of information over the course of the last year, however, it’s been anything but random. If you’re a subscriber or regular reader, you’ve probably noticed the themed approach that’s been used to build upon, and provide a body of knowledge about, different retirement income planning topics. This has included the creation of a customized Glossary of Terms to assist in the understanding of the technical subject matter. The Glossary currently includes definitions of 84 terms.
Following the initial post, the next 11 posts addressed the retirement planning paradigm shift from retirement asset to retirement income planning, including associated risks associated with the former type of planning that has been the impetus for this shift.
The last 8 posts of 2009 focused on creating and optimizing retirement income via strategic systematic implementation of single premium immediate (“SPIA’s”) and deferred income (“DIA’s”) annuities. This series culminated in the December 28, 2009 interview of Curtis Cloke, the inventor of the Thrive® Income Distribution System, one of the leading retirement income planning solutions available to financial advisors.
2010 kicked off with the January 4th publishing of What Tools Does Your Financial Advisor Have In His or Her Toolbox? This post cited a 2009 Fidelity study that found that 83% of investors between the ages of 55 and 70 who are working with a fee-based adviser believe it’s more important for them to generate guaranteed (subject to individual insurers’ claims paying ability) income for retirement than to deliver above-average returns. The implied dilemma is that not all financial advisors have made the transition from using retirement asset to retirement income planning strategies for their clients.
Beginning with the January 11th post, Year of the Conversion, the last 30 posts have focused on a retirement income planning strategy that, although it has been around since 1998, was thrust into the limelight this year with the removal of its entrance barrier. I’m referring to the Roth IRA conversion technique that, up until 2010, was limited to taxpayers with modified adjusted gross income of less than $100,000.
While anyone who has a traditional IRA can convert part or all of his/her accounts to one or more Roth IRA accounts to embrace the two main attractions of a Roth IRA, i.e., nontaxable distributions and no required minimum distributions (“RMD’s”), this strategy isn’t necessarily beneficial for all traditional IRA owners. This is one area where multi-year income tax and retirement income planning analysis is essential for determining (1) who is a good candidate, (2) how much traditional IRA should be converted, and (3) when conversions should be made. In addition, there are various tricks and traps that need to be understood and incorporated in Roth IRA conversion planning in order to increase the probability for success.
I want to thank all of my readers for taking the time to read Retirement Income Visions™. A special thanks to my clients and non-clients, alike, who have given me great feedback regarding various blog posts. Last, but not least, thank you to my amazing wife, Nira, for all of her support with this endeavor. She has spent many a Saturday morning the last year doing other activities while I’ve been sitting at my desk writing this blog.
Robert Klein, CPA, PFS, CFP®, RICP®, CLTC® is the founder and president of Retirement Income Center in Newport Beach, California. Bob is also the sole proprietor of Robert Klein, CPA. Bob applies his unique background, experience, expertise, and specialization in tax-sensitive retirement income planning strategies to optimize the longevity of his clients’ after-tax retirement income and assets. He does this as an independent financial advisor using customized holistic planning solutions based on each client’s needs and personality.