Join Deanne Rosso, CEO of Elevate Wealth Advisory, and Wealth Adviser Clarke Holt as they discuss the crucial transition phase of retirement. In this episode, they delve into what the transition stage means for new retirees and how it offers unprecedented flexibility in managing taxes and income streams. Deanne explains the significance of planning your income sources strategically, from personal savings to pensions, and the potential benefits of early Roth conversions. Whether you're approaching retirement or are curious about efficient retirement income strategies, this discussion provides valuable insights.

FULL TRANSCRIPT:

Hey! This is Clarke Holt, and I'm your host this week for Elevate Wealth. So this week I've been speaking with clients about the different phases of retirement, and this week we want to talk about the transition stage. And I'm very pleased to have our President and CEO Deanne Rosso with me. So, Deanne, what should the main focus be for clients right after retiring? That's such a great question, Clarke. So first let's note what the transition phase is. The transition phase is the time from when you receive your last paycheck to when you begin receiving required minimum distribution. So that's age 73 or 75. Early retirement. Not only are you literally transitioning into retirement, but for most people this is the time when you'll have the most flexibility of your entire life when it comes to taxes. So right before retirement, many people are in the highest earning years of their career. Then when you retire and you get your last paycheck, what happens? You get your last paycheck, which can be really nerve-wracking. But you've got to decide how you've built those retirement savings and where that income comes from, and you also get to decide how much income you're going to take, at least initially. Especially if you retire before 65, before you're forced to take Social Security, or required minimum distributions, or pensions. You get to decide which type of accounts you tap first to deliver that retirement income, and that comes with a lot of potential lifetime tax-saving power if done correctly. So what do you mean, "correctly?" Well, during transition, the flexibility of your income is the most important focus, so you want to evaluate your available income sources, like your personal savings, your retirement accounts, your pensions, your Social Security and look at the type of taxes that are involved with each source, and then you stack those up in the right order to even out your tax liability over time. You might even want to do something like Roth conversions, which is essentially volunteering to pay tax earlier in order to lower a potentially heavier tax burden down the road. So thanks for joining me, Deanne, and if you're watching or listening and you want to learn more about that next phase, subscribe and check out our next video. We'll see you next time!