Retirement can be scary. It’s very common for our clients to be concerned about the longevity of their portfolios.
Taking a holistic view of your entire portfolio and mapping out a long-term plan will positively impact the length and quality of your retirement. By forecasting and planning ahead for withdrawal order, RMDs, and tax implications, you will be able to make more informed decisions about what to do now.
To this end, we are introducing a new feature called Smart Withdrawal™ as an addition to our popular Retirement Planner tool. Smart Withdrawal is available exclusively to our advisory clients.
Smart Withdrawal uses advanced tax forecasting to predict your optimal account withdrawal order in retirement. Should you draw from your taxable account before your IRA is depleted? And when to start taking from your Roth? This tool will lay it all out for you, year by year. Best of all, the tough calculations are all managed behind the scenes. Give us a few financial data points, your state of residence, and your retirement spending goals, and we will do the rest.
Here is what Personal Capital Clients will see:
Smart Withdrawal will map out all of your recommended income sources, as well as expected dividends and any portfolio withdrawals necessary to reach your after-tax retirement spending requirements. It will show you which type of account to draw from, and display your resulting estimated taxes. All of this will be mapped against your Spending Line, shown above in black. When Required Minimum Distributions (or RMDs – the amount you are required to withdraw from certain retirement accounts after age 70 ½) kick in, Smart Withdrawal will layer them on top as well. If Roth conversions or Tax Gain harvesting makes sense, we will alert you through this tool.
Our goal here is clarity. If you understand the effect of additional income, spending, and most importantly taxes on your portfolio over time, you’ll be able to make better decisions with increased confidence. Your financial future is laid out right in front of you, and can adapt dynamically as you make changes and additions over time. As a client of Personal Capital, you also have an advisor who is there to lead you through these updates and discuss their implications.
To learn more about this feature and to begin working with Personal Capital, contact a financial advisor.
Disclaimer: The calculations in Smart Withdrawal are based solely on information provided by the user, data based on the accounts that users have aggregated on the Personal Capital dashboard, historical market returns, and the assumptions shown or selected. Because there is no way to know all information about your finances or your personal situation, analysis may be incomplete or inaccurate. All insight provided represents a courtesy extended to you for illustrative purposes only and you should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. No representations, warranties or guarantees are made as to the accuracy of any estimates or calculations. Personal Capital is not liable for any damages or costs of any type arising out of or in any way connected with your use of this calculator. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance, and future returns may be less favorable or negative. Keep in mind that investing involves risk.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.