Retirement planning is a crucial aspect of financial health, and understanding how to manage your retirement withdrawals can make a significant difference in your financial security during your later years. This newsletter will explain the rules regarding when you can begin withdrawing from various retirement accounts, discuss detailed retirement withdrawal strategies, provide updates to required minimum distributions (RMDs), and look at how to integrate these withdrawals with other income sources.

When Are You Allowed to Take Withdrawals?

Each type of retirement account has specific rules for withdrawals:

Retirement Account Withdrawal Strategies

Choosing a strategic approach to withdrawing your retirement funds can help ensure that your savings last throughout your retirement. Many withdrawal strategies evolve over time as needs and life changes occur:

  1. The 4% Rule: This strategy involves withdrawing 4% of your total portfolio each year of retirement. This approach is designed to balance income needs with the goal of maintaining capital longevity over approximately 30 years.
  2. Equal Systematic Payments: Under this method, you withdraw the same amount periodically, whether monthly or annually. This strategy offers predictability but does not account for changes in personal expenses or inflation.
  3. Dynamic Strategies: These strategies adjust your withdrawal amounts based on specific factors such as economic conditions, market performance, or changes in personal financial needs. They often include:
    • Dynamic Spending Rules: Adjust withdrawals based on portfolio performance. If investments perform well, you might increase withdrawals slightly, and vice versa.
    • Guardrails: Establish upper and lower limits on withdrawals to ensure the portfolio isn't depleted too quickly during downturns or overly conserved during upturns.
  4. Bucket Strategies: This involves dividing your retirement funds into different 'buckets' assigned to different periods of your retirement. For example, the first bucket might contain cash for immediate expenses, the second might be invested in bonds for medium-term needs, and the third in stocks for long-term growth.

Required Minimum Distributions (RMDs)

Recent legislative changes have altered the age at which RMDs must begin from age 72 to age 73 and eventually age 75:

Failing to meet RMD requirements can lead to significant penalties, including a 25% excise tax on the amount that should have been withdrawn. It’s crucial to incorporate RMDs into your withdrawal strategy to avoid these penalties and to optimize your tax liabilities.

Coordinating Withdrawals with Other Income Sources

Many retirees will also receive income from Social Security, pensions, or may even continue to work part-time. Strategically integrating these sources with your withdrawal plan can help manage your tax bracket each year and provide a balanced approach to generating retirement income. For example, you might delay taking Social Security benefits to maximize the monthly payout, relying more on personal savings in the early years of retirement.

Another example of coordinating your withdrawals with other retirement income sources involves strategically timing the withdrawal of funds from tax-deferred accounts (like traditional IRAs or 401(k)s), taxable accounts (individual or joint brokerage accounts), and tax-exempt accounts (like Roth IRAs) to manage tax liabilities effectively.

For instance, if a retiree expects a higher taxable income in a particular year—perhaps due to selling a property or receiving a large payout from an investment—they might choose to withdraw less from their tax-deferred accounts to stay in a lower tax bracket and instead use funds from their Roth IRA, which can be withdrawn tax-free. This strategy helps minimize the overall tax burden by balancing the types of withdrawals to take advantage of lower tax rates in other years.


Managing retirement withdrawals effectively involves understanding the rules that apply to your accounts, choosing a strategic approach to withdrawing funds, being aware of recent changes to RMDs, and coordinating these withdrawals with other income sources. We regularly consult with our clients to determine the most appropriate strategy for their specific situation, ensuring their retirement funds are managed wisely.

If you have any questions about your retirement withdrawal strategy, please feel free to reach out to us.

Thank you for reading,
The Canty Financial Team

Bill Canty, CFP®, CPA, Financial Planner

Ed Canty, CFP®, Financial Planner

Joe Canty, CFP®, Financial Planner

Tina Alteri, CPA, Tax Advisor

Maureen Walsh, EA, Tax Advisor

We are excited to begin 2024, marking the 37th year of our firm's history. As we continue our journey, here are some important updates and enhancements to our services that we're thrilled to share with you.

Firm Updates and Our Services:

Market Overview:

Read our latest market insights and our recent rebalance strategy in our CFM Investment Commentary. We invite your questions and look forward to discussing these topics with you.

Enhanced Portfolio Management:

We're excited to continue our collaboration with institutional portfolio managers such as J.P. Morgan, BlackRock, Clough Capital, and State Street. This partnership aims to optimize our model portfolios, leveraging their extensive market experience and advanced analytical tools. This strategy enhances our ability to offer you diversified, robust investment options tailored to meet your individual financial goals.

Technology Resources & Updates:

Stay Informed:

Stay up to date on the latest financial planning news by subscribing to our monthly newsletter here.

Looking Forward to 2024:

We encourage you to explore the new features of our software and connect with a CFM advisor for personalized and tailored guidance. We look forward to helping you navigate your financial journey into the new year.

Best regards, The Canty Financial Management Team

Bill Canty, CFP®, CPA, Financial Planner

Ed Canty, CFP®, Financial Planner

Joe Canty, CFP®, Financial Planner

Tina Alteri, CPA, Tax Advisor

Maureen Walsh, EA, Tax Advisor

A question we are often asked is whether or not you can claim Social Security while working. The answer to this question is yes you can. However, it’s not that simple. The question to ask is should you claim Social Security while working? In answering this question it's important to understand the rules regarding earned income, taxes, and your Social Security benefits. 

Key ages for claiming Social Security benefits 

There are some key ages to keep in mind in connection with claiming Social Security benefits: 

Social Security and working 

For those who are working, drawing Social Security benefits and who have not reached their FRA, there is a benefit reduction if your earned income exceeds $21,240 for 2023. In these cases, there will be a $1 benefit reduction for every $2 that your earned income exceeds these limits. Earned income is defined as income from employment or self-employment. This does not include income from sources like interest or investment gains. 

For those working in the year in which they attain their FRA, the earnings limits increase to $56,520 for 2023. In this case, there is a $1 benefit reduction for every $3 in earned income above these limits. 

There are no limits on your level of earned income, and no benefit reductions once you have reached your FRA. Note that any withheld benefits are returned to you in the form of a higher monthly payment once you reach your FRA. Even with this, it probably doesn’t make sense to claim your benefit prior to your FRA if you know that all or most of the benefit will be lost due to your level of earned income. 

One issue that may confuse some people is the Social Security COLA or cost of living adjustment. The COLA for 2023 is 8.7%. If you defer claiming your benefit you do not lose out on this COLA, it simply will be factored into your benefit when you do claim in the future.

A one-time do over

There is a once per lifetime do-over option once you have claimed your Social Security benefits. Let’s say you decided to totally retire at age 62. Since you had no plans to ever work again you decided to claim your Social Security benefits. 

Nine months later, you realized that you were bored and decided to work with a consulting firm that serves companies in your former industry. Your compensation will be $75,000 which is well above the Social Security earnings limit. 

You have the option to withdraw your application. This is a once per lifetime opportunity and must be done within a year after you initially claimed your benefits. Withdrawing the application allows you to reapply later when you are no longer working or you reach the age at which your benefit will no longer be impacted by the level of your earned income. 

When doing this, all benefits received by you plus anyone else who received benefits based on your retirement application must be repaid. Additionally, these benefit recipients who are impacted must consent to this application withdrawal in writing. 

Social Security and taxes 

Social Security benefits can be subject to federal income taxes based on your combined income, which the Social Security Administration defines as: 

Adjusted gross income (AGI) plus nontaxable interest income plus ½ of your Social Security benefits. 

For those filing as single: 

For those filing married and joint: 

Additionally, 12 states currently tax Social Security benefits in some fashion at the state level. 

If you are working your benefits will almost certainly be subject to income taxes. It's important to increase your withholding to cover these added taxes.

We help our clients determine the best time to claim their Social Security benefits based on their overall situation. If you are still working this is certainly a factor in this decision. For help in deciding when to claim Social Security and in all aspects of financial and retirement planning please feel free to reach out to us. As both financial and tax advisors we help our clients design tax-efficient retirement income strategies.

Bill Canty, CFP®, CPA, Financial Planner

Ed Canty, CFP®, Financial Planner

Joe Canty, Financial Planner

Maureen Walsh, EA, Tax Advisor

Tina Alteri, CPA, Tax Advisor

The period leading up to your retirement is a critical time to ensure that you have your financial plan in place as you enter retirement. Financial planning doesn’t stop once you retire, things change and your need to stay on top of things and adjust as needed. This is the focus of much of our work with clients approaching and in retirement. 

Here is a checklist of items to review during the 12 months leading up to retirement. 

Your Retirement Budget 

One of the most important things to do during this period is to formulate a retirement spending budget. This will drive almost everything else that you do financially in retirement. This budget should take into account your normal monthly costs plus money to cover things like travel or other activities that you plan to do in retirement. 

Sources of Retirement Income 

During this period it's important to identify all sources of retirement income that you can tap. This might include many of the following: 

Depending upon your situation there may be additional sources of income to consider as well. It's important to be sure that you have your arms around all potential sources of retirement income, and how much income you might generate from each of these sources. Additionally, you will want to be sure that you understand the tax implications of tapping each of these income sources. 

Retirement Withdrawal Strategy 

Putting a retirement withdrawal strategy in place is critical. Which accounts will you withdraw funds from and in what order? This will be driven by a number of factors including your age at retirement. When you claim your Social Security will certainly be a factor in this strategy. 

This goes hand-in-hand with your retirement budget and also encompasses tax planning in terms of whether to tap taxable or tax-deferred retirement accounts first. 

Regularly reviewing and adjusting your retirement withdrawal strategy is vital for effective financial planning during retirement. Our team specializes in assisting clients with this essential aspect of retirement planning.

401(k) & Employer Retirement Plans

When our clients retire or leave their employer, they often ask about what to do with their 401(k) or similar retirement plan. We assist them with rolling over their plan to an IRA, developing a retirement withdrawal strategy, and ensuring their investments are aligned with their goals and time horizon.

For many individuals, the 401(k) or employer retirement plan represents their largest retirement savings, so it's crucial to develop a well-defined strategy for managing and investing these funds throughout retirement.

Transferring a 401(k), 403(b), TSP, or Deferred Comp to an IRA account offers several advantages for portfolio management. It provides a wider range of investment options, such as individual stocks, bonds, ETFs, and a more extensive selection of mutual funds compared to employer-sponsored plans. Rolling over the employer plan allows for better integration into an overall investment strategy and alignment with other managed assets. Moreover, IRAs often offer lower-cost investment options when compared to employer retirement plans.

When taking required minimum distributions (RMDs) or taking distributions from tax-deferred accounts, it's important to consider the associated tax implications and engage in tax planning. Additionally, careful consideration should be given to selling the appropriate investments to facilitate distributions.

Healthcare Costs 

A key budget item is the cost of healthcare. Depending upon the circumstances surrounding your retirement, how you cover the cost of healthcare may vary over the course of your retirement. 

In the case of a married couple, if one spouse is still working while the other spouse retires the working spouse may be able to add their spouse to their employer’s policy. If you are retiring as part of an early retirement package from an employer, check to see if they offer any extended health insurance benefits.

Medicare is the main vehicle to cover healthcare costs in retirement and it's important to learn as much as you can about the basic coverage offered by Parts A and B as well as other options such as drug coverage and Medicare Advantage plans. You can learn more about the basics of Medicare in our article here

Social Security 

Prior to retiring, you should obtain a copy of your Social Security statement and review it for accuracy. It’s important to be sure that all of your earnings are properly credited to your record as this is the basis of how your Social Security benefits are calculated. If you find omissions it's important to contact the Social Security Administration immediately to get this corrected. 

During this time period, you should also review your benefit levels based on claiming at various points in time. This will help you determine when is the best age at which to claim your benefit as part of your overall retirement financial picture. 


If you are covered by a defined benefit pension plan from your employer, this is the time to be sure you understand how to claim your benefit and any options available to you as to how to receive your benefit and the benefit level based on when you claim it. 

Most defined benefit plans offer the benefit as a monthly annuity payment. The payment amount may differ based on the age at which you commence your benefit. Some companies may also offer the option to receive a lump-sum payment versus the stream of annuity payments. 

You will also want to ensure that your beneficiary information is up-to-date. If you are married, the beneficiary is generally your spouse, but you should verify to be sure. 

You may also be entitled to a pension benefit from a former employer if they offered a pension plan and you were vested in a benefit prior to leaving that employer. Vesting typically occurs after five years. You should contact that former employer to be sure you are on top of what needs to be done to initiate your benefit. 

Stock Compensation

If you have received any type of stock-based compensation from your employer, you want to be sure that you understand what needs to be done to take full advantage of this prior to leaving the company. 

This might include stock options, restricted stock units (RSUs), or other vehicles. Be sure that you understand when and how to convert these vehicles to shares and also any restrictions on selling the shares if desired. 


Many might think that once you retire worrying about taxes is a thing of the past. In fact, taxes are among the top issues that retirees need to focus on. During the year leading up to your retirement, you will need to do some tax planning in conjunction with formulating your withdrawal strategy. You will also want to look at the tax impact of pension payments and other streams of retirement income. Assisting clients with tax planning is a regular part of our services, both as they approach retirement and throughout their retirement years.


In the year leading up to retirement, or prior to that time, there are a number of planning issues to resolve and things to verify. The items listed above are a good starting point, your list may differ a bit depending upon your own unique situation. The more prepared you are, the more likely you are to enjoy a financially successful retirement. 

If you are looking for guidance about your retirement plan or any other financial issues, please contact us to discuss. We are here to help.

Bill Canty, CFP®, CPA

Ed Canty, CFP®, Investment Advisor

Joe Canty, Investment Advisor

Maureen Walsh, EA, Tax Advisor

Tina Alteri, CPA, Tax Advisor

Changing jobs is a time of transition with a lot to do. Getting up-to-speed at your new employer is important and a top priority. When leaving a company, it’s crucial not to forget about your old 401(k) account. What to do with this retirement money is a critical decision to make during this period of transition. 

Your Options 

When leaving your employer you have several options regarding your 401(k) account balance. 

Taking a distribution will generally result in the money being subject to taxes and potentially a 10% penalty for those who are under age 59 ½. Unless the money is needed immediately for some reason, we generally do not recommend this option. 

Leaving the money in your old employer’s plan can be a good option in some cases. However, some plans treat former employees differently from active participants in terms of the investments available to them. They may even place their money in a separate account designated for former employees who have left their balances in the plan. 

We generally advocate that clients who are leaving their job consider rolling their plan balance over to either an IRA or in some cases to their new employer’s plan if applicable. 

The Benefits of Consolidation 

To the extent possible, it makes sense for investors to have their investments in as few places and accounts as is feasible for their situation. For example, it's easy to forget about an old 401(k) account at a former employer, especially if the account balance is relatively small. All retirement savings are important and should be managed in line with your overall retirement planning and investment strategy. 

Rolling your 401(k) account to an IRA at an outside custodian or to a plan at your new employer, if applicable, can help ensure that this money is properly managed and not forgotten. It's easier to focus on managing funds in a smaller number of locations than if the money is spread across a number of accounts held by various custodians. 

Having investments spread around in a number of locations is also terribly inefficient and takes more work on your part in terms of reviewing your asset allocation and other aspects of your overall portfolio. 

Advantages of a Rollover to an IRA 

Rolling a 401(k) over to an IRA account at an outside custodian offers a number of advantages in terms of managing your portfolio. It is often the path we recommend to our clients who are leaving their job and moving on to another company, or into a self-employment situation. 

First, the IRA will offer a much wider array of investment choices than leaving the money in an old employer’s 401(k) or rolling the money over to a new employer’s plan. This includes investments such as individual stocks, bonds, and ETFs plus a much broader array of mutual funds than what is typically available inside a 401(k) plan. 

This wider range of investment choices allows us to integrate this additional retirement money into the overall investment strategy we employ for the client’s other assets directly under management by us. We always work with clients to integrate the choices within their employer’s 401(k) plan into their overall strategy. But having the money in an IRA allows us to utilize the same investment options we use elsewhere in the client’s portfolio. 

The quality of the investment menus inside 401(k) plans varies widely. Some plans offer a solid array of investment options. Plans offered by larger employers may offer a better menu than plans from smaller employers. However, when our client’s money is rolled over to an IRA, we can often invest the money in lower-cost options than those that were available in their old 401(k). 

IRAs can also offer a degree of planning flexibility that may not be available in a 401(k). If it makes sense to do so, money held in a traditional IRA account can be converted to a Roth IRA. Money that was held in a designated Roth account in an old 401(k) can be rolled over to a Roth IRA where it will not be subject to required minimum distributions when you reach that age. 

Rolling Over to a New Employer’s 401(k) Plan 

In some cases, we find that it makes sense for a client to roll their 401(k) balance over to a new employer’s 401(k). The key factor is the quality of the investments offered in their new employer’s plan. If this is the case, then merging their old 401(k) account into this new plan can enable you to manage a large portion of your retirement in a consolidated fashion that is in line with your overall strategy. 

For those who are working at age 73 and beyond, money held in their employer’s 401(k) is exempt from required minimum distributions as long as they are not a 5% or greater owner of the company and if their company makes this election as part of the plan documents. 

Additionally, 401(k) plans offer higher levels of creditor protection than IRAs, which can be a factor for some investors. 


When leaving an employer, your choices regarding your 401(k) are important. This retirement money needs to be managed in a fashion that is consistent with your overall investment strategy to help ensure that it keeps working to fund your retirement goals. Generally rolling this money to an IRA, or in some cases to a new employer’s 401(k), will be the best course of action. 

Please give us a call to discuss your 401(k), IRA, or any other financial issues. We are here to help. 

Bill Canty, CFP®, CPA

Ed Canty, CFP®, Investment Advisor

Joe Canty, Investment Advisor

Maureen Walsh, EA, Tax Advisor

Tina Alteri, CPA, Tax Advisor

For many of us, our employer’s 401(k) plan is our primary retirement savings vehicle. Participating in the plan is generally easy and painless. Your contributions are deducted from your paycheck each pay period, there is nothing that you need to do other than select how you want your money invested. Some companies even offer a matching contribution on top of what you contribute. 

Even with these attributes, you still want to be sure that your company’s 401(k) plan is a good one and that it is a good place for your retirement savings. It's important to evaluate the plan in several areas. 

Investments Offered 

A key factor in evaluating your company’s 401(k) is the quality of the investment lineup offered. Quality encompasses several features. 

Do the mutual funds or other investment offerings allow you to build a diversified portfolio? Are there funds offered across a range of asset classes and sub-asset classes for stocks, bonds, and a cash option? Does the plan offer several low-cost index funds, for example, an S&P 500 index or one that replicates the total U.S. stock market? 

How do the funds compare to other funds in the same asset class? Where mutual funds or ETFs are used you can check on this using a service like Morningstar. The annual fee notice report that you receive from your employer will generally show a comparison of the investments to a benchmark like the S&P 500 or the Russell 2000, but usually not to other funds in the same asset class peer group. 

Company Matching 

Matching from your employer can help increase your plan balance. This is basically free money. The matching formula might be on the order of a 50% match on the first 6% of your salary deferral contributed to the plan. The higher the match obviously the better.

Another aspect of the employer match is the vesting formula, this refers to the time period in which the company match is yours should you leave the company. A typical formula is that you earn ownership in 20% of the match each year with full ownership occurring after five years with the company. 

In addition to a matching contribution, some companies will make an annual profit-sharing contribution to your 401(k) account. These contributions are optional, the company can skip a year if they had a bad year financially or for any other reason. 

All of these company contributions serve to enhance your retirement savings efforts beyond your own contributions. The amount that your company contributes to the plan on your behalf is a factor in evaluating the quality of your plan. 


High expenses are a major impediment to retirement savers trying to build a retirement nest egg. Studies by the SEC and others have shown that even a relatively small difference in investment expenses can have a dramatic impact on the growth of your investments over time. 

Plan expenses come in several forms. There are the expense ratios of the mutual funds or other investments offered. Expense ratios are deducted from the gross returns of the funds the same as with investments in mutual funds made outside of the 401(k). 

Some plans may also charge some or all of the administrative costs of running the plan to the accounts of the participants. This is generally done on a pro-rated basis determined by the relative size of your balance as a percentage of the total assets in the plan, but there may be a different formula used in some cases. 

Plan expenses are disclosed in the annual fee notice that your employer is required to send to you. You may have to dig through it a bit to determine what expenses beyond the mutual fund expense ratios are being charged to your account. What you will need to do is to look up the fund’s expense ratio in the prospectus that you were given, or in the case of mutual funds, you can do so on a site like Morningstar. If there is a difference between the expense ratio of the fund and the amount listed on the annual fee report, this will represent the plan administrative fees being charged to your account. 

What Can You Do if Your Plan is Subpar? 

If you’ve done your homework and you decide that your company’s plan is not as good as it could be, you have some options. One is to not contribute to your plan or to only contribute enough to receive the full match offered by your company if they do matching contributions. This isn’t the most preferable option as you are missing out on the ability to contribute to a tax-advantaged retirement account. 

If you are married and your spouse has access to a good plan through their employer, be sure to max out contributions to that plan. 

If you feel your employer’s plan could be improved in terms of the plan’s expenses or the quality of the investment menu, it can pay to voice your concerns to the plan’s administrator or to senior management. Of course, you want to be respectful in voicing your concerns, and you will need to be able to articulate the issues you see. Perhaps it is with the quality of the investments or the costs of the plan. With the rash of participant lawsuits against 401(k) sponsors in recent years, many employers are more receptive to this type of feedback. For many companies having a good 401(k) plan is a vehicle to attract and retain top employees in a competitive job market. 

We periodically review our client’s 401(k) plans as part of the financial planning and investment services we provide. The assets in their 401(k) accounts are a key piece of their overall investment portfolio. In the process of determining how they should invest their 401(k) assets, we review the overall quality of the plan to help us make those recommendations. 

If you have any questions about your investments, including your 401(k) plan, please reach out. 

Bill Canty, CFP®, CPA

Ed Canty, CFP®

Joe Canty, Investment Advisor Rep.

Maureen Walsh, EA, Investment Advisor Rep.

Tina Alteri, CPA, Tax Advisor


The term “financial planning” is a common one that is often written about in the financial press. Many financial advisors list financial planning among the services that they offer to clients. We believe this is a critical part of the services that we provide our clients. 

But what is financial planning? We think its important for our clients and for anyone considering our services to understand what financial planning entails. 

The CFP Board defines financial planning as: 

“Financial Planning is a collaborative process that helps maximize a Client’s potential for meeting life goals through Financial Advice that integrates relevant elements of the Client’s personal and financial circumstances.” 

We concur with this definition, especially that it is a collaborative process. Here are the key points in the process from our perspective. 

Defining Client Goals 

The financial planning process is about financial advisors devising strategies to help their clients achieve their various financial goals. A good financial advisor will ask their clients a lot of questions about their financial goals and then listen to the answers. Beyond any training or certifications that a financial advisor might have, their most important skill is the ability to listen. 

Client goals may include saving for retirement, managing their income in retirement, saving for college, a new home or a host of others. Advisors should ask about a client’s goals regarding providing for dependents or family members via estate planning.   

Client goals and priorities will vary among clients based on their age, family situation and a host of other factors. 

Gather Client Data 

A key part of the process is for the financial advisor to gather data from their client to use in their analysis of the client’s situation. Much of the data gathering concerns gathering formation about the client’s assets and liabilities. This includes retirement accounts, investments, a pension, ownership of business, stock-based compensation, real estate and a host of other types of assets. On the liability side your advisor should ask about any mortgages, business indebtedness, student loans and other liabilities you may have to others.   

They should ask about any estate planning documents that are in place as well as any life, disability or long-term care insurance that is in place. Ensuring that all beneficiary designations on insurance policies and retirement accounts are up-to-date is a critical issue that can be dealt with here. Many financial advisors will ask for recent tax returns as well as there is a wealth of information there, and the return may raise some additional questions from the advisor. 

Data gathering goes beyond financial information, the data gathering process should include details of the client’s family as well. 

Develop the Initial Plan 

Once the financial advisor has gathered the relevant financial and personal data, and they are comfortable that they understand their client’s financial goals and risk tolerance it's time to develop the initial financial plan. This will include the advisor’s recommendations in areas like retirement planning, an investing strategy, estate planning, tax planning and other relevant areas. In the case of a business owner client it will likely include strategies around business exit planning if applicable. 

Review and Revise 

Once your financial advisor has completed the initial version of the financial plan they should share this document with you to allow you time to review it. Once you’ve had a chance to review the plan the next step is generally a meeting with the advisor to review it together

This review process is a good time to be sure you understand what the advisor is recommending as next steps. It is also a time to ask questions. It's important that you feel comfortable with the plan and the implementation steps that the advisor is suggesting. In some cases a look at the initial draft of the plan might cause the client to review their own goals and make some changes if needed. 

This is all positive and any good financial advisor is glad to revise their plan based on their client’s input. The whole point of the financial planning process is to help clients visualize their financial goals and to buy into a strategy to achieve their goals. 

Update and Repeat

Perhaps the most important part of the financial planning process is the realization that this is not a one-time thing. If you are working with a financial advisor on an ongoing basis, part of the periodic reviews they conduct with clients should include reviewing all or part of the financial plan to determine if things are on track. 

In addition to determining if a client is on track towards a goal like retirement, the review process will help the advisor understand any changes in the client’s circumstances, or perhaps in their financial goals. 

Life isn’t static and neither is the financial planning process. For example, if your investments have performed better than expected, the advisor might adjust your asset allocation to reduce risk a bit to help preserve your investment gains. 

Clients change their plans as well. If a client decides to retire early, either voluntarily or due to a layoff, this will have an impact on their financial plan and will likely call for some adjustments. The death of a spouse, a divorce or leaving a job to start a business are all life situations that will likely call for adjustments to your financial plan. 

Communication is Key 

One way to judge if you are working with the right financial advisor is the frequency and quality of their communications with you. Updates in the form of reports or newsletters are great. Beyond this, a key issue to consider is whether or not your advisor asks questions on a regular basis. 

This should start with your initial meeting with them and through the process of developing the initial financial plan. But the process of asking questions and listening to the answers is something that a good financial advisor will do throughout their relationship with you. 

This might be the most important part of the financial planning process. Asking questions and getting clients to discuss issues of importance to them is the best tool that an advisor has to help them in determining if changes to a client’s financial plan are needed. 

If you are looking for a fee-only, fiduciary advisor to help you develop a financial planning strategy now and through the years, please give us a call to discuss your situation and see how we can help you.

Bill Canty, CFP®, CPA

Maureen Walsh, EA, Investment Advisor

Ed Canty, CFP®Investment Advisor

Joe Canty, Investment Advisor

Tina Alteri, CPA, Tax Advisor

We read a lot about the importance of saving and investing for our retirement throughout our working careers. This is critical and we encourage our clients to save as much as possible and advise them on how to invest for retirement

What doesn’t always receive as much emphasis is the importance of pre-retirement planning, specifically the 5-10 years leading up to retirement. Here are a number of steps we suggest that you consider during the critical time leading up to retirement. 

Review Social Security 

Social Security is a key source of retirement income for most retirees. This is a good time to review your Social Security statement. The statement will tell you what your projected benefits would be at several different claiming ages.

Additionally, you can review your earnings history. This is important as your benefit is calculated based upon your 35 highest-earning years. If you find that some years of earnings are missing or seem incorrect, you can contact Social Security to have this corrected. You can sign up to receive your statement on the Social Security site

As part of this review, you might begin to consider when you will claim your benefits. If you are married, you will want to look at this issue in terms of the benefits both of you have earned and other factors such as your relative ages and the level of your respective benefits


If you are eligible for a pension from a current or former employer be sure that you understand the benefits that you are entitled to and how to go about claiming these benefits. In the case of a former employer, be sure to contact them to ensure that they have your contact information. 

Some pensions offer several options to claim your benefits. There might be one or more options to annuitize your benefit. Additionally, in some cases, you might also have the option to take your benefit as a lump-sum that could be rolled over to an IRA account

Retirement and Investment Accounts 

It’s important to be sure that you have a handle on any retirement and other investment accounts that you own. This might include IRAs, 401(k)s, 403(b)s, or other employer retirement accounts plus any taxable investment accounts. First, it's important to ensure that there are no old accounts that are not being managed. We see this all too often with old employer retirement accounts that people have just forgotten about. 

The years leading up to retirement are a good time to consolidate accounts if needed. If you have a few old 401(k) accounts and several IRA accounts, perhaps it makes sense to consolidate these accounts into a single IRA account to facilitate managing these assets.

Additionally, you will want to look at your overall asset allocation across all types of accounts to ensure that your investments have the proper balance between potential return and downside risk protection

Other Retirement Resources 

Beyond the items listed above, you might have additional financial resources that can be tapped to help fund your retirement, including: 

Health Care Costs 

Healthcare expenses in retirement are large and often overlooked retirement expenses. Fidelity Investments’ latest survey pegs the cost of healthcare in retirement for a hypothetical couple both aged 65 at $295,000. And this doesn’t include any potential costs for long-term needs. 

If you are planning to retire or are forced to retire due to a job loss or another issue, prior to age 65 you will need to have a plan to obtain health insurance prior to being eligible for Medicare. If you have access to a health savings account (HSA) you should consider funding it and not spending the money prior to retirement, in order to use these funds to help cover some of your healthcare costs in retirement on a tax-free basis

Other factors 

Other factors to consider as you approach retirement might include: 

These or any other unique factors in your personal situation can have an impact on your retirement spending. 

Your Retirement Lifestyle 

During this time frame it's important to take at least a preliminary look at your retirement lifestyle and the anticipated cost of this lifestyle. 

You will want to ask and answer questions like: 

The answers to these and a number of other questions will form the basis of a preliminary expense budget for retirement. You will need to factor in the impact of any of the other factors listed above as well.

It’s understood that things may and often do change in the years leading up to retirement and once you are retired for a while. But doing a preliminary budget might be the first time that you’ve actually taken a look at what your desired retirement lifestyle will actually cost on a monthly basis. 

Your Potential Retirement Income 

Taking your various investment accounts, Social Security, a pension if applicable, and the other resources you might have, you will want to try to come up with an annual level of income and cash flow that your resources might generate. 

Where Do You Stand? 

Comparing your preliminary expense budget to your anticipated retirement income will tell you if your projected retirement income will be sufficient or whether you will have a shortfall. Either way, it's better to have an idea of where your stand with some time remaining until retirement versus being unpleasantly surprised at the last minute. 

If you do come up with a shortfall you have sufficient time to make adjustments. Perhaps this means you will need to work for a few extra years. Perhaps this means you will need to adjust your projected expenses in retirement. 

This type of analysis is not a one-time shot, you should revisit this periodically in the years leading up to retirement in case your situation changes. 

This is the type of pre-retirement planning we routinely do with our clients. If you’d like some help with your retirement financial planning please give us a call.

Saratoga County: 518-885-3230

Collier County: 239-435-0090

Bill Canty, CFP®, CPA

Ed Canty, CFP®

Maureen Walsh, EA, Investment Advisor Rep.

Tina Alteri, CPA, Tax Advisor

Joe Canty, Investment Advisor Rep.

If you recently received a letter offering you a lump sum distribution or an annuity from a former pension plan, you may be trying to weigh your best options.

Your former employer can inform you of the choices available to you, but they are not able to offer guidance about what choice will be best for your own situation.  Here are some things to consider as you make your decision on choosing a lump sum or annuity from your pension.

Annuity Option

 If you choose an annuity you will receive a monthly check for the rest of your life.  With this option, you do not have to worry about how to invest your monthly or whether you will outlive your savings. 

The biggest drawback is that annuities are rarely indexed for inflation so your monthly benefit will lose buying power over time. Once a fixed annuity is annuitized (converted to a stream of income), your principal is committed to the insurer.  

In a low interest-rate environment, like we currently have, choosing an annuity means you may be locking into a low rate of return for the rest of your life.

Lump-Sum Option

A one- time payment offers the ability to control your income stream and plan for your income taxes.

The most important thing about this choice is to be aware of possible taxable events. 

In order to avoid tax on the lump-sum distribution, you will need to roll the funds directly into an IRA account.  Once the funds are in the IRA account you will need to decide on how to invest them: either on your own or with the help of an investment advisor

Overall the Lump Sum choice gives you more flexibility as you move forward.  It is always advisable to have at least six to nine months of living expenses set aside in a liquid savings account, and if the funds are tied up in an annuity you may face steep penalties if you try to get the funds out.

On the IRA side, any distribution you take from the IRA before age 59 1/2 is subject to a 10% penalty

If you leave the funds in the IRA account until age 72 you will be required to begin minimum distributions each year. 

Which Option is Best?

Your decision should be based on your unique needs, so an overview of your financial situation is a primary consideration. 

If you need guidance with making a decision about the choices you are offered, call our office to consult with us. 

Bill Canty, CFP®, CPA

Maureen Walsh, EA, Investment Advisor Rep.

Tina Alteri, CPA, Tax Advisor

Ed Canty, CFP®

Joe Canty, Investment Advisor Rep.

Subscribe to Our Monthly Newsletter!

Stay Up to Date on the Latest Financial Planning News.
Canty Financial Management
20 Church Avenue 
Ballston Spa, NY, 12020

5129 Castello Drive Suite #1
Naples, FL, 34103
Michael Canty Memorial Fund
Legal, privacy, copyright and trademark information.

Ready to create your financial roadmap?

Want to see if our services are right for you?
Schedule a complimentary, 15-minute phone call today.
Schedule a Call
Copyright © 1987 – 2024 Canty Financial Management Inc. All Rights Reserved.
Website managed by Stallion Cognitive
heartchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram