Retirement Planning

Retirement planning answers three questions: how much income you will need, where that income will come from, and how to make it last as long as you do. The answers depend on your age, your savings, your taxes, your health and the people who depend on you, which is why a rule of thumb is only a starting point.

Toomey Investment Management is a multi-generational family firm in Wallingford, Connecticut. We build retirement plans that bring investments, taxes, insurance and estate planning together, and the same advisor stays with you from the first meeting through your retirement years. This page explains how we approach each part of a retirement plan and links to our more detailed articles.

What matters most changes as you get closer to retirement. Early in a career, the biggest advantage is time. Contributing enough to collect a full employer match and choosing between Roth and traditional accounts can matter more than picking investments. Our page on accumulation and planning covers this stage.

In your peak earning years there are more moving pieces. Income, taxes, college costs and aging parents all compete for the same dollars, and this is when asset and tax planning have the greatest effect. See peak earnings and pre-retirement.

Once you retire, the job shifts from saving to spending. The plan has to turn savings into a reliable paycheck while managing taxes, market swings and health care costs. Our retirement and distribution page explains how we plan for that phase.

A common rule of thumb says you will need about 80% of your pre-retirement income. It is a reasonable place to start, but your real number depends on whether you have paid off your mortgage, how much you plan to travel, where you will live and what your health care will cost. We build a budget for your actual retirement and test it against different scenarios. Our article How Much Income Do You Really Need in Retirement? walks through the math.

If you are still saving, the target works backward from that number. Starting earlier means each dollar has more time to grow, which is why when you start saving matters as much as how much.

Taxes do not stop when your paycheck does. Withdrawals from traditional IRAs and 401(k)s count as taxable income, a portion of Social Security can be taxable, and required minimum distributions eventually force money out of pre-tax accounts whether you need it or not. The order in which you draw from each account, and whether a Roth conversion makes sense in lower-income years, can change how long your savings last.

Our advisors prepare tax returns every year, and every client’s plan includes tax planning at no additional charge. Learn more on our tax planning and tax preparation page.

The most common retirement planning mistakes are simple ones: starting late, underestimating how long retirement lasts, ignoring taxes, taking too much or too little investment risk, and never revisiting the plan. Most of them are easier to fix the earlier you catch them. Read Retirement Planning Mistakes and How to Avoid Them.

When should I start planning for retirement?

As early as you can. Time is the biggest advantage a saver has, and early decisions such as collecting an employer match and choosing between Roth and traditional accounts are easier to make well than to fix later. That said, it is never too late to put a plan in place.

How much do I need to retire?

It depends on what you will spend, what income you will have from Social Security and any pension, and how long your savings need to last. Rules of thumb such as 80% of your pre-retirement income are a starting point. We build a budget for your actual retirement and test it under different market and inflation scenarios.

When should I claim Social Security?

There is no single right age. Claiming early reduces your benefit for life, and waiting increases it. Your health, your other income and, for married couples, the effect on a surviving spouse all matter. We model the options as part of your plan.

Do you only work with people who are about to retire?

No. We work with clients at every stage, from early in their careers through retirement, and with business owners planning their own exit. The plan changes with you, and the same advisor stays with you.

Where is your office?

Our office is at 420 Center Street, Floor 1, in Wallingford, Connecticut. Call 203-949-1710 to schedule a conversation.

More reading: A Retirement Crisis in America, Unwrap the Gifts Hidden Inside Your Retirement Plan, How a Financial Planner Keeps Retirement on Track and What Is Phased Retirement?