How to individualize your retirement plan and ensure you are financially ready

PHOENIX — A growing trend among Americans is postponing their retirement. For some, it’s due to financial uncertainty. Others just aren’t emotionally ready.

On the latest episode of the Asset Preservation Hour, financial advisor Stewart Willis talked about this new trend, stressed the importance of individualizing your retirement plan and broke down the things you need to know to ensure you’re financially ready.

“Most people’s biggest fear is running out of money, not having enough,” Willis said. “And I think that most people just don’t have a good enough set of metrics to determine whether they’re going to be ready or not.”

Willis added that spreadsheets and DIY calculations are common, but those often lack critical adjustments for inflation and market fluctuations, leading to flawed assumptions.

One way for people to get clarity and ensure they are financially ready is through professional analysis, using advanced tools to project income sustainability under various scenarios.

Simple calculations, such as determining withdrawal rates against expected returns, can reassure individuals that their savings will last — even under conservative growth assumptions.

However, Willis warned against letting political or emotional biases influence financial decisions.

“I think what most people need to realize is that you are not in your 20s anymore. You can’t take the same amount of risks that you took when 2008 happened or even … when April happened,” Willis said. “What we saw was, quite honestly, the dichotomy of political perspectives that affected the way people reacted to the markets.”

Instead, he recommended focusing on fundamentals and leveraging tax-efficient strategies to preserve wealth, regardless of external noise.

What else do you need to know to be ready for retirement?

Starting at age 73 (and eventually 75), retirees have Required Minimum Distributions (RMDs) and must withdraw a minimum amount from tax-deferred accounts like IRAs and 401(k)s.

Failure to comply can result in steep penalties — currently 25%, down from the previous 50%. Willis stressed that RMDs are not optional and require careful timing to avoid unnecessary tax burdens.

The complexity increases for married couples with separate accounts and age differences. Each spouse must calculate RMDs individually, and errors can lead to costly consequences.

“We see just poorly distributed RMDs all the time,” Willis said. “Here’s the thing: if you don’t need your required minimum distribution, instead of taking it as an RMD, you can actually do it as a qualified charitable distribution.”

QCDs allow individuals over 70.5 to donate directly from their IRA to qualified charities and satisfy their RMD requirements without triggering taxable income — a significant advantage for those who no longer itemize deductions.

Willis highlighted that informed decisions in this area can transform mandatory withdrawals into meaningful contributions.

Another aspect of retirement that Willis discussed is health insurance. Medicare is often misunderstood as a comprehensive solution for healthcare in retirement.

“There are a lot of things that it doesn’t cover,” Willis said. “Long-term care or custodial care, extended rehabilitation, a lot of those oftentimes require separate insurance or must be paid out of pocket.”

Willis noted that in these cases, supplemental insurance or self-insurance strategies are essential.

Annual reviews of Medicare plans are equally as important, according to Willis.

Changes in coverage, co-pays and co-insurance can significantly impact retirees’ budgets. Willis recommended that they scrutinize annual notices of change and consult trusted advisors to ensure their plans remain competitive and adequate.

Willis’ overarching message is that retirement planning must be individualized. Cookie-cutter solutions fail to account for unique variables such as age gaps, health conditions and lifestyle goals.

Willis recommended seeking professional guidance and emphasized that by integrating tax strategies, healthcare planning and income optimization, retirees can achieve peace of mind and enjoy the retirement they’ve envisioned.

Claim a free portfolio review by Asset Preservation Wealth & Tax online, or call 877-573-8437 for more information.

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