Retirement Planning Considerations Part 4: Tax Planning and Long-Term Planning

Ken Weingarten |

Retirement Planning Considerations: Tax Planning and Long-Term Planning

As part of our 4-part blog series (click to read Part 1, Part 2, Part 3), we went over common considerations and questions to ask yourself when planning for retirement. In this final blog, we will discuss other wealth-building and preservation strategies that you should consider during retirement.

Tax Planning Considerations

  • Required Minimum Distribution: Once you turn age 72, you will be obligated to take required minimum distributions from your retirement account(s). Any distributions from these accounts will be considered ordinary income for tax purposes. Not taking the annual required distribution can result in serious tax penalties which you want to avoid.
  • Roth Conversions: If your income is low during retirement years, especially before you must take Required Minimum Distributions, you should consider making Roth Conversions. Doing so will allow you to take advantage of the tax-free growth of a Roth account. If your goal is to maximize how much wealth you want your heirs to inherit or minimize your Required Minimum Distributions as you age, a Roth Conversion may be right for you. More information on Roth Conversion considerations can be found in our earlier blog here.
  • Tax Bracket Management: You should consider how your distributions affect your income level when tax season comes around. Taking too large of a distribution may accidentally push you into a higher tax bracket and result in an unnecessarily higher tax bill. Understanding your cash flow needs on an annual basis and planning around it can smooth out the tax filing process.

Long-Term Planning

  • Estate Planning: As we transition into different stages of life, especially retirement, your estate plan should be reviewed & updated as needed to ensure your wishes are fulfilled. Updating your estate documents, reviewing your beneficiaries, and planning for any expected estate tax liabilities above the lifetime exemption ($11,580,000/person for 2020) should be the bare minimum of estate planning considerations.
  • Charitable Contributions: Charitably inclined individuals should consider the tax benefits of donating. Donor Advised Funds and Qualified Charitable Distributions are two leading strategies to take advantage of during your retirement years. Additionally, if your charitable inclinations extend into your estate plan, the use of Charitable Trusts could be right for you. More information about 2020’s charitable contribution options can be found here.

Ultimately, there are many more finer details that will have to be addressed during retirement. Consulting with a financial advisor to help understand your situation and having a well-defined plan will go a long way in accomplishing your life’s goals.


Weingarten Associates is an independent, fee-only Registered Investment Advisor in Lawrenceville, New Jersey serving Princeton, NJ as well as the Greater Mercer County/Bucks County region. We make a difference in the lives of our clients by providing them with exceptional financial planning, investment management, and tax advice.