Navigating Retirement in 2024: Insights from Five Experts

Navigating Retirement in 2024: Expert Strategies for a Secure Future

 As we step into 2024, a sense of excitement fills the air, promising a new beginning and renewed motivation. However, for those planning for retirement, this period is also fraught with uncertainty. Ongoing concerns about inflation, fluctuating interest rates, and the impending presidential election add layers of complexity to the year ahead. In such times, drawing upon expert insights becomes crucial for making well-informed decisions.

Having curated a network of 230 highly qualified registered investment advisers (fiduciaries) with expertise in maximizing savings, minimizing taxes, and ensuring robust estate planning, I tapped into this wealth of knowledge. Five leading retirement planning experts shared their current strategies to best prepare clients for the challenges of 2024. Here's a summary of their insights:

Consider the Advantages of Roth Conversions

• Financial adviser Katherine Brown highlights the benefits of Roth IRAs for both investors and heirs, with their provision for tax-free withdrawals.
• Individuals aged 55 to 72 are advised to consider converting smaller amounts of their traditional IRAs to Roth IRAs while in a lower tax bracket before required minimum distributions and Social Security benefits begin.
• This strategy is particularly beneficial for those planning to leave an inheritance, offering heirs the option to defer withdrawals and avoid hefty taxes within 10 years, a common scenario with traditional IRAs.
• Brown emphasizes the importance of timely action, especially regarding backdoor Roth IRA conversions, a strategy beneficial for high-income earners ineligible to contribute directly to a Roth IRA.

Rebalance Your Portfolio

Portfolio manager Marc Lieberman stresses the importance of regularly rebalancing investment portfolios, especially after years marked by high market volatility.

Many investors' portfolios may have drifted away from their intended allocations, making rebalancing crucial.

With expectations of heightened volatility in 2024, Lieberman suggests diversifying with gold and short-term Treasuries, serving as stabilizers in turbulent times.

He cautions investors to brace for volatility due to factors such as a presidential election, potential Federal Reserve rate changes, softer labor markets, weaker corporate profits, and consumers running out of excess savings.

Explore Private Debt for Enhanced Return Potential

Eric Hutchens, CIO at Allodium Investment Consultants, advocates for private debt funds as a key retirement income idea for 2024.

Private debt funds offer attractive yields with diversification benefits and are less susceptible to market volatility compared to publicly traded stocks and bonds.

Hutchens notes the variety within private debt funds, ranging from lower to higher risk profiles, providing significant diversification and returns beyond traditional investments.

Utilize High Rates with a Laddered Approach

Financial adviser Melissa Walsh recommends locking in today's attractive interest rates, particularly with certificates of deposit (CDs) and municipal bonds.

FDIC-insured CDs currently offer yields between 4% and 4.75% for maturities ranging from one to five years.

Walsh highlights the tax benefits of municipal bonds, offering federal tax exemption on interest for those anticipating a higher income tax bracket during retirement.

She suggests a "bucket approach" for managing investments, segregating funds for near-term and long-term needs, providing resilience against market volatility.

Navigate Changing Tax Laws Without Attempting to Time Congress

Robert Carroll, MD at Carnegie Investment Counsel, advises caution and strategic planning amidst evolving tax laws.

With the Tax Cuts and Jobs Act of 2017 set to expire at the end of 2025, he cautions against reactionary moves based on speculations about congressional actions.

Carroll emphasizes taking time to understand individual tax situations, considering variables like itemization, standard deduction, effective tax rate, and marginal tax rate.

He highlights an opportunity for higher-income families, with more company retirement plans allowing participants to make Roth contributions, as facilitated by the SECURE 2.0 Act.

the strategies shared by these experts offer a diverse set of approaches to navigate the complexities of retirement planning in 2024. However, it's crucial to tailor these recommendations to individual circumstances. Consulting with a fee-only financial adviser ensures that actions align with specific financial goals and circumstances, providing a solid foundation for a secure retirement journey.

Finance

Retirement planning

Savings

almost half of all americans report having less than _________ in savings.

the total student loan debt owed in the u.s. is currently about how much?

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which ancient civilization is believed to have introduced one of the earliest retirement systems

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list the five foundations in order. how can they help you make wise choices with your money?

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a financial plan is a formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities.

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when creating a budget, log fixed expenses before income. after income. after savings. at the top.

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