• Developing your retirement income strategy is part of the Envision® process.
  • We can help you analyze possible expenses and sources of income.
  • Checking on your strategy annually can help you maintain course.

It starts with a plan

Creating a plan can help you stay focused, plan for challenges ahead, and make choices that work for you. 

Our Envision planning process is the foundation we use to develop your retirement income plan. It can help you make choices and tackle the following topics:
  • When and how can I retire with confidence?
  • How can I help make my money last as long as I’m retired?
  • Where will my income come from?
  • How do I prepare for and respond to events throughout retirement?
  • When and how should I address my legacy goals? 

7 common retirement planning moves

Will the money in your investment accounts last through retirement? Here are some steps that go beyond the basics of using tax-advantaged funds and making regular contributions.
 
  1. Monitor your portfolio - Conduct regular investment checkups on your own and with us.
  2. Maintain emergency savings - Wells Fargo Advisors recommends keeping an emergency fund with enough money to cover living expenses for three to six months. Keep emergency funds in a liquid account you can easily access if needed.
  3. Set an appropriate asset allocation - Investments are fluid. Some are more volatile, but all can be affected by market fluctuations. Adjust your assets to align with your current goals and tolerance for risk.
  4. Itemize your income plan - Understand where your retirement funds will come from. List out all sources, such as Social Security and pensions. For each item, list how it might generate income for your portfolio.
  5. Clean up your accounts - Consider consolidating accounts. You’ll not only have less paperwork, you can help keep an eye on your asset allocation and overall investment strategy.  We can talk about your choices and what might make the most sense for you. Before taking any action, speak with your current retirement plan administrator and tax professional.
  6. Sell assets strategically - Selling assets can have tax implications. Proceeds could nudge you into a higher tax bracket. Balance the concern of minimizing taxes when you’re selling assets with your portfolio’s allocation strategy. Talk with us about the choices you have in this situation.
  7. Talk with family - Partners and spouses should be on the same page regarding your financial portfolio. Cover some key financial details: 
    • Current total assets
    • How much you have saved right now
    • How much is in each account
    • Where the funds are located
    • Your budget
Part of your plan is how you spend your money – now and when you retire. Talk about it.


Common risks to address

While we develop your retirement plan, you’ll want to look at risks such as inflation, market events, health needs, withdrawal strategy, and how long you’re likely to live. Understanding the impact these challenges may have on your savings and planning for them can help you stay the course. 


Have an ongoing process

Planning for retirement is not a “one and done” kind of activity. A good plan should be checked regularly and adjusted, as necessary. Keep an eye on your portfolio, talk about your expectations, and prepare for the unexpected.
 
Schedule an annual checkup with us to review your plans, your current circumstances, and your portfolio. We’ll work together to discuss your choices and what works for you.


Next steps 

  • Think about what you hope your retirement will be.
  • Write down all your possible sources of income and expenses in retirement.
  • Take a look at your portfolio and call us if you have any questions about changing your asset allocation.
  • Call us to start on your personalized retirement income plan.
 

Wells Fargo Advisors does not provide tax or legal advice. 


Investing involves risk including the possible loss of principal. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. Diversification does not guarantee profit or protect against loss in declining markets. Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments. An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations. Dividends are not guaranteed and are subject to change or elimination.
  • You can benefit from tax-advantaged investing in an IRA.
  • Consider contributing to an IRA even if you participate in a qualified employer sponsored-retirement plan (QRP).
  • Find out which type of IRA – Traditional or Roth – is right for you.

IRAs can help you meet your retirement goals

Even if you already participate in a qualified employer sponsored-retirement plan (QRP) such as a 401(k), 403(b) or governmental 457(b), an IRA can help supplement these savings. Similar to a 401(k), IRAs offer the potential for growth in a tax-advantaged account. Over time, that can make a significant difference in your retirement savings.


Types of IRAs

Both Traditional and Roth IRAs offer tax advantages, a wide variety of investment options, the flexibility to choose whether or not to invest annually, and the same contribution limits. 

  • Traditional IRA - Offers tax-deferred growth potential. You pay no taxes on any investment earnings until you withdraw or “distribute” the money from your account, presumably in retirement.1 Additionally, depending on your income, your contribution may be tax deductible.1 
  • Roth IRA – Offers tax-free growth potential. Earnings are distributed tax-free in retirement, if a five-year waiting period has been met and you are at least age 59½, or as a result of your death, disability, or using the first time homebuyer exception. Since contributions to a Roth IRA are made with after-tax dollars, there is no tax deduction regardless of income. 
  • Who can contribute to an IRA - You and your spouse, if filing jointly, can contribute to a Traditional IRA if you are under age 70½ and have earned income. You can make a non-deductible contribution to a Traditional IRA even if your income exceeds Modified Adjusted Gross Income (MAGI) deduction limits. You and your spouse, if filing jointly, can contribute to a Roth IRA at any age as long as you have earned income and are at or under MAGI phase-out limits. 
  • Small business SIMPLE & SEP IRAs - SEP IRAs and SIMPLE IRAs are often offered by small businesses as a retirement plan for their employees. These plans can be ideal for small businesses with a few employees. A SEP IRA is a Traditional IRA that holds employer contributions under the SEP plan.2

IRA contribution limits and deadlines

IRS rules state how and by what date you can make your IRA contributions. IRA contributions must generally be made by April 15 for the prior tax year. If you are over 50, within a particular tax year, you can contribute an additional $1,000 catch-up amount each year. 

Call us to discuss the exact date for this year and the amount you can contribute, or check out IRS Publication 590 found here:


Retirement plan distribution options 

When you change jobs or retire, you generally have four options for your retirement plan assets:

  1. Roll assets to an IRA
  2. Leave assets in your former employer’s plan, if the plan allows
  3. Move assets to your new/existing employer’s plan, if the plan allows
  4. Cash out through what’s called a “lump sum distribution,” pay taxes and perhaps a 10% IRS tax penalty
There are advantages and disadvantages to each option. The best one for you depends on your individual circumstances.3  Since your retirement plan savings may represent a substantial source of income in retirement it’s important to think about all of the following:  

  • The difference in fees and expenses between the QRP and IRA
  • When penalty-free distributions are available
  • Your need for help making investment decisions and other services offered
  • Any special considerations regarding your employer stock
  • Timing of required minimum distributions (RMDs)
  • Protection of assets from creditors and bankruptcy
We can sit down and look at your choices together so you can decide which one makes the most sense for you. Before you make any decision or take any action, speak with your current retirement plan administrator and tax professional. 


Next steps

  • Make an appointment with us to go over your IRA choices.
  • Fund your IRA.
  • Find out if you can deduct your Traditional IRA contribution. 


1
Traditional IRA distributions are generally taxed as ordinary income. Qualified Roth IRA distributions are federally tax-free provided a Roth account has been open for more than five years and the owner has reached age 59-1/2 or meets other requirements. Qualified Roth IRA distributions are not subject to state and local taxation in most states. Both may be subject to a 10% IRS tax penalty if distributions are taken prior to age 59-1/2.


2Withdrawals are subject to ordinary income tax and may be subject to a federal 10% penalty if taken prior to age 59-1/2. For SIMPLE IRAs, the federal penalty increases to 25% if a distribution is taken prior to two years from the first deposit made into a participant’s account if under age 59-1/2.

3Please keep in mind that rolling over assets to an IRA is just one of multiple options for your retirement plan. Each of the following options is different and may have distinct advantages and disadvantages.
  1. Roll assets to an IRA
  2. Leave assets in your former employer’s plan, if plan allows
  3. Move assets to your new/existing employer’s plan, if plan allows
  4. Cash out or take a lump sum distribution 
When considering rolling over assets from an employer plan to an IRA, factors that should be considered and compared between the employer plan and the IRA include fees and expenses, services offered, investment options, when penalty free withdrawals are available, treatment of employer stock, when required minimum distributions begin and protection of assets from creditors and bankruptcy. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with employer-sponsored retirement plans. You should consult with the plan administrator and a professional tax advisor before making any decisions regarding your retirement assets.