The Retirement Tax Window: The Years When Doing Nothing Can Be Expensive
Explore retirement tax planning strategies, including Roth conversions, RMDs and tax-aware withdrawals, to help manage taxes throughout retirement.
Author: Brandon Jordan, CFP®, CHFC®, CEPA®, CVGA®, CLU®, MSA | CEO of Impact Advisors Group
I recently returned from Camp Berea’s Family Camp on Newfound Lake.
For a few days, our normal routines were interrupted. We stepped away from work, schedules, sports commitments, and the seemingly endless list of things that need our attention. We saw old friends, made some new friends, spent some intentional time together as a family, and hopefully created some lifelong memories. While we were there, I also got up much earlier than normal (often catching the sunrise). It wasn’t just quiet, it was genuinely peaceful.
Something interesting happened. I came home thinking a bit differently about money. Not about investments. Not about markets. Not about how to earn more. I found myself thinking about where and how we can better steward the resources that we already have.
Family Camp gave me an opportunity to realign how I’m living out the things that I say matter most: my faith, our marriage, our children, our family, our friendships, and our community.
It also forced me to ask myself a slightly uncomfortable question:
Does the way we spend our money actually reflect those priorities? Would an independent observer be able to discern my supposed priorities if he/she reviewed my cash flow?
I recently read Morgan Housel’s The Psychology of Money. (It had such an impact on me, that I’m considering purchasing a copy for each client.) One of the themes that stuck with me is that doing well with money has surprisingly little to do with how smart we are. Rather, our behavior around money as well as our relationship with money is much more IMPACTful than most people realize.
The truth is, our cash flow tells a story about what we value.
Every dollar that comes into our household ultimately has to go somewhere. We can:
1. We can spend it – exchanging money for something we value today.
No explanation or professional guidance needed. Most of us have mastered this one. Need proof? Ask our Amazon delivery driver!!! J
2. We can save it – preserving resources for future needs and opportunities.
The only way the balance decreases is IF we choose to take money out.
3. We can invest it – accepting prudent risk in pursuit of long-term growth.
There is a possibility of loss in the short term with a probability of gain in the long term.
4. We can speculate with it – accepting greater uncertainty in pursuit of a potential gain.
There is a probability of loss and a possibility of gain.
5. We can gamble it – accepting unfavorable odds for the possibility of a payoff.
There is an expectation of loss with a possibility of gain.
6. We can give it away – using our resources to create an IMPACT beyond ourselves.
Charitable endeavors often yield some of the most IMPACTful results.
At IAG, much of our work naturally focuses on saving, investing, and giving. But none of these six uses of money exists in a vacuum. None of the choices are inherently right/wrong, BUT they ARE choices and our choices reveal our priorities.
As financial advisors, we spend a lot of time talking about investment allocation. How much should be invested in stocks? Bonds? Real estate? Private investments? Cash? Those are certainly important conversations. But perhaps there’s an allocation/stewardship decision that comes BEFORE all of them:
How should we steward our cash flow to support the life we’re actually trying to build and the impact we’re seeking to have?
That’s a VERY different conversation.
Most successful people are very good at accumulating. We’re wired to reinvest in the business. Buy another property. Increase the investment account. Save for retirement. Upgrade the house. There’s nothing wrong with any of those things. But accumulation can quietly become the goal instead of the tool. That’s when money begins to work against the very life we intended it to support.
And this is where Camp Berea’s Family Camp challenged me. There are seasons when the highest return on a dollar may not show up on a financial statement.
These decisions may not maximize your net worth. They may maximize your life. That distinction matters.
Good financial planning shouldn’t simply answer the question, “How can we accumulate more?” It should eventually help us answer a much more important question:
“How much is enough… and what do we want our money to make possible?”
Our cash flow is one of the most powerful tools we have to answer that question.
The objective isn’t perfection. I certainly came home from Family Camp recognizing areas where my own spending could be better aligned with what I say I value. The objective is intentionality. Because ultimately, financial planning isn’t simply about getting the numbers right. It’s about making sure the numbers are supporting the life we actually want to live.
If you’ve never looked at your cash flow through that lens, I’d encourage you to do it. And if you’d like someone to help you think through it, we’re always happy to have that conversation.
The purpose of wealth isn’t simply to increase our standard of living. It’s to increase our capacity to live an IMPACTful life.
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