Part 1: Revisiting your Earlier Plans
Today’s retiree faces a different set of issues than those faced by retirees faced in the past. People generally are living longer and spending more years in retirement.* Traditionally, retirees moved most of their assets into investments that provided a fixed income. But many of today’s retirees need to invest for growth as well as income, so that their assets will continue to support them long into the future.

Not only are people living more years in retirement, they are also healthier. For many, retirement is a time for travel and pursuing new interests. But these pursuits cost money. Many traditional pre-retirement financial plans assume that post-retirement expenses would be lower. If that’s not the case, the plans must be rethought.

Another major change that’s occurred over the last few decades is the increase in complexity of retirement assets and income. In the past, a retired couple may have had one Social Security payment, one pension payment, and income from savings. Today, each spouse may have lump-sum assets, such as a profit-sharing distribution, proceeds from the sale of a business, or pension payout, as well as periodic distributions from retirement programs. All of these income-producing assets must be managed for both maximum effectiveness and minimal taxes.

Part 2: Issues to Consider
Post-retirement financial planning involves more than investment decisions. A comprehensive plan encompasses developing strategies to maintain purchasing power in the face of inflation, preparing for emergencies and major events in the future, determining the timing for withdrawing money from retirement plans, and planning how best to use proceeds from the liquidation of assets (sale of a home or business, lump sum distributions, etc.). In addition, there are issues concerning financial responsibilities in the event of disability or impairments and the eventual distribution of assets to beneficiaries.

Your post-retirement financial plan should begin with the basics: net worth, income and expenses. Analyzing these three factors will help you determine how long your assets will last at various rates of investment return, inflation, and spending.

Together, you and your financial professional can determine both your current income needs and the amount of growth you will need in your assets in order to meet anticipated future expenses. You can then devise a diversified investment plan that may include annuities, stocks, bonds, short-term instruments, real estate and other investment classes to help you meet your goals. Your plan will also address timing decisions, budgeting, taxes, insurance, and your estate.

Part 3: Planning to Ensure Sufficient Income for the Present and the Future
With the cost of medical care and other major expenses for the elderly rising rapidly, there is real anxiety about eventually outspending assets. One way to relieve that anxiety is to budget for savings early in your retirement, so you can continue adding to your assets. In later years, if the income from your investments is not sufficient, your plan can encompass systematic withdrawals from principal to supplement income.

Of course, the key to living comfortably in retirement is to maximize the income your assets generate. First, you will want to consider the nature of your retirement assets and the sequence in which to liquidate them. Failure to consider timing decisions could result in extra taxes or penalties—and compromise the size of your nest egg.

Tax efficiency of investments is another important consideration. Once assets are no longer tax-deferred, you want to make sure that buying and selling decisions—whether you make them yourself or they are made by a fund manager—minimize the amount of taxes you owe.

If you are investing in fixed income securities whether tax-free or taxable securities, consider “laddering” maturities—that is, buying securities that mature in different years. That way, if interest rates go up, you don’t have everything locked into securities with low interest rates.

Part 4: Making Sure Your Assets Provide Full Benefit to Others
For retirees, a critical element of financial planning is estate planning. If you’re fortunate enough to have sizable assets, there is much you can do now to ensure that those you hope to benefit receive the largest possible value of your bequest.

No matter the size of your assets, everyone should consider having:

• a basic estate plan that includes a will and/or living trust,
• durable power of attorney, a living will,
• and nomination of a conservator or guardian in the event of disability.

For those whose assets are large enough to potentially trigger estate taxes,* there are many additional considerations. Some of these considerations might include use of

• the Unified Tax Credit,
• Marital Trusts,
• life insurance in trust or to help fund estate taxes,
• Annual Gift Tax exclusions,
• donating appreciated property to a charitable trust,
• and many others.

Your financial professional, together with your attorney and tax advisor, can help you establish or review your estate plan to make sure it still reflects your wishes.

AXA Advisors, LLC does not provide legal or tax advice. Please consult your tax or legal advisor regarding your individual situation.