Sudden changes to your financial position can strongly impact your financial and life goals. Your first impulse, for instance, may be to change your retirement plans - but that may not be your best choice.
There are serious tax consequences to your distribution so any spending decision you make must give strong consideration to the income tax impact. If you are under age 59, it is very likely that it would be financially unwise to “spend” any of your ESOP proceeds now.
Your assets will need to last for the long run, so you’ll want to consider your future needs, not just short-term goals. Important considerations include: your age, your access to Social Security and how much you can withdrawal from your investments. A good rule of thumb is to plan on an annual 4% distribution from your retirement accounts to fund your living expenses
in retirement.
Financial models indicate that a 4% distribution is likely to be sustained indefinitely while keeping your annual income and your nest egg on pace with inflation. If that level of distribution isn’t enough to meet your cash flow needs, you may not want to call it quits just yet.
QUESTIONS TO ASK BEFORE YOU MAKE ANY MAJOR LIFE DECISIONS.
- Do you have outstanding debt that you’d like to pay off?
- What are your current income needs?
- Do you plan to pay for your children’s education?
- Are you planning to buy a first or second home?
- Are you considering giving to loved ones or a favorite charity?
- Are there ways to minimize any upcoming income and estate taxes?
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To learn more, call Jess Malone at 717-255-7573 or use the form below.
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Jessica Malone is not affiliated with Raymond James.
Please note: changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
Fulton Financial Advisors and Clermont Wealth Strategies operate through Fulton Bank, N.A. and other subsidiaries of Fulton Financial Corporation and are headquartered at One Penn Square, Lancaster, PA 17602.
Fulton Financial Advisors and Clermont Wealth Strategies operate through Fulton Bank, N.A. and other subsidiaries of Fulton Financial Corporation, including Fulton Insurance Services Group, Inc. The Advisors at Fulton Financial Advisors and Clermont Wealth Strategies offer a broad array of financial products and trust and retirement services some of which are provided through ValMark Securities, Inc., and/or Raymond James Financial Services, Inc., independent and unaffiliated registered broker/dealers, Members FINRA/SIPC; and/or Executive Insurance Agency, Inc., and/or Specific Solutions, Inc., unaffiliated licensed insurance agencies; Investment advisory services offered through Raymond James Financial Services Advisors, Inc. and/or ValMark Advisers, Inc., unaffiliated investment advisory firms registered with the SEC. Raymond James Financial Services, Inc. is not affiliated with Specific Solutions, Inc., Executive Insurance Agency, Inc., ValMark Securities, Inc., ValMark Advisers, Inc., Clermont Wealth Strategies, Fulton Financial Advisors, Fulton Bank, N.A., Fulton Financial Corporation or any of its subsidiaries. Neither ValMark Securities, Inc., ValMark Advisers, Inc. nor Executive Insurance Agency, Inc. is affiliated with Clermont Wealth Strategies, Specific Solutions, Inc., Fulton Financial Advisors, Fulton Bank, N.A., Fulton Financial Corporation or any of its subsidiaries.
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