Written by: Elissa Wurf, PhD, CPA, EA

Older woman, nearing retirement, looking at flowering bushAt Agili, we strive to be there for you, our valued clients, at every phase of life. Of course, we help you create a financial plan and develop investment strategies throughout your career, but as you get closer to the age at which you will retire, we take special care to ensure a smooth and successful transition. Some of the specific ways we guide you through this time in life are captured below.


Some of the Ways Agili Advises Clients Nearing Retirement:
  • Help you think through and develop your goals.
  • Develop possible alternatives to your base case retirement plans, considering unexpected retirement or how working a few years longer than planned may lead to better outcomes.
  • Manage your “retirement red zone” (the five years before and after retirement). Market returns during this time have been shown to disproportionately influence sustainable withdrawal rates. We ensure that your allocation during this period is appropriate.
  • Plan so that your essential expenses in retirement are covered with predictable income (Social Security, pension, bond or CD ladder, annuities). Again, we help by making sure that your “low-risk” assets match your individual risk tolerance. We also assist with Social Security optimization.
  • Plan for contingencies with emergency reserves for unexpected medical, household, or car expenses. You may not know when these emergencies will come, just that they will come. We help by encouraging you to maintain cash reserves and by helping determine the most tax-efficient place to draw from if you need to take an unexpected distribution from your portfolio.
  • Suggest ways to maintain a two to three-year cash bucket so you will not need to panic during downturns. Part of your Investment Policy Statement explicitly refers to cash reserves and whether these will be maintained inside or outside the portfolio.
  • With your cash bucket, contingency reserve, and sources of predictable income covered, you can take more risk with the rest of your portfolio. We consider whether increasing equity exposure in your portfolio throughout your retirement will improve your retirement outcomes. We help you understand and manage risk appropriately to your financial situation, including not just market risk but inflation risk. For more on equity exposure during retirement, click here.
  • Flexibility in discretionary spending can extend portfolio longevity. We can help by having regular discussions about your major upcoming spending goals.
  • Our investment team helps provide downside protection with the tactical use of derivative strategies.
  • High inflation may return in the future. It is important to build income streams that have inflation protection. Social Security is one such source. We help you invest in assets that do well in inflationary times, such as equities.
  • Prepare for potential changes in the tax system. While we cannot predict with specificity the tax changes that are on the horizon, we know some changes are inevitable and help you plan accordingly. For example, we may suggest strategic Roth conversions, help you make decisions about the appropriate asset location for retirement distributions, and recommend tax-free investments when warranted.
  • Finally, and very importantly, we provide peace of mind that you are spending appropriately to your means.

Of course, if you have any questions about retirement planning, feel free to contact your financial strategist at any time.