Many retirees say they once thought of retirement as a distant dream—until, suddenly, it was right around the corner. With millions of Californians nearing retirement in the next decade, many wonder if they’re as prepared as they should be.

Rising living expenses, volatile markets, and California’s complex tax landscape can create uncertainty, making retirement planning more challenging than expected.

With countless sources of financial advice available, you may ask, “How exactly can a financial advisor help me, and what should I consider before working with one?”

At Bulman Wealth Group, we provide solutions that help Californians pursue retirement plans tailored to their goals and lifestyles. With decades of experience, our team understands the unique considerations involved in preparing for retirement in this state.

This article explores how working with the right financial advisor can simplify the complexities of retirement planning in California, helping you move forward with greater understanding and confidence.

Unique Challenges for California Pre-Retirees

Planning for retirement in California comes with distinct challenges that can affect how you save, spend, and prepare for the future.

Cost of Living

California’s cost of living is among the highest in the U.S. Housing, healthcare, and everyday expenses can quickly strain retirement income. Pre-retirees need to plan thoroughly, factoring in current living expenses while saving for future costs that are likely to rise over time.

Complex Tax Landscape

Taxes play a significant role in shaping retirement income in California. Most retirement income is taxable, with Social Security being a notable exception. While Proposition 13 limits annual property tax increases, high property values still contribute to overall expenses. Potential future tax hikes could further impact income planning, making it important to understand how state taxes affect your financial strategy.

Natural Disasters

Sadly, California has faced severe natural disasters in recent years, adding another layer to retirement planning. Pre-retirees should review insurance coverage, build an emergency fund, and explore asset protection strategies to help manage potential financial setbacks.

How a Financial Advisor Can Help

Preparing for retirement involves more than just saving—it requires thoughtful planning, strategic investments, and careful tax considerations. A skilled financial advisor provides valuable insight into your unique financial situation. Here’s how an advisor can make a difference.

Personalized Retirement Income Planning

Everyone’s retirement goals are different. Whether you envision traveling, spending more time with family, or supporting charitable causes, a customized income plan can help support those aspirations. A financial advisor can:

• Develop a retirement income strategy based on your lifestyle goals, anticipated expenses, and desired legacy.

• Analyze Social Security claiming strategies to determine the most beneficial time to begin benefits, including options for spousal benefits and delayed credits.

• Explore sustainable income sources like pensions, annuities, and investment withdrawals to maintain cash flow throughout retirement.

Investment Planning and Diversification

As you near retirement, managing risk becomes increasingly important. An advisor can:

• Evaluate your risk tolerance and help diversify your portfolio across asset classes (stocks, bonds, cash, and alternatives).

• Review concentrated stock positions that could expose you to unnecessary risk.

• Structure an asset allocation model that matches your goals, market outlook, and time horizon.

Tax Optimization Strategies

Taxes can substantially reduce retirement income, making tax-efficient strategies essential. A financial advisor can assist with:

• Identifying opportunities to maximize contributions to employer-sponsored plans (401(k), 403(b), 457) or self-employed options (SEP IRAs, SIMPLE IRAs, Solo 401(k)s), helping lower taxable income while increasing retirement savings.

• Evaluating whether a Roth IRA suits your situation. If you have a traditional IRA, an advisor can help determine if a Roth conversion fits your tax planning goals.

• Reviewing where to hold certain investments, as qualified dividend-paying stocks may be better suited for taxable accounts, while tax-inefficient assets may benefit from tax-deferred accounts.

Estate and Legacy Planning

Thoughtful estate planning helps preserve your assets and support your loved ones or charitable causes. An advisor will help you in:

• Reviewing and updating wills, trusts, beneficiary designations, and powers of attorney to reflect your current wishes.

• Developing strategies to minimize estate taxes and simplify asset transfers.

• Exploring charitable giving options, including QCDs, donor-advised funds (DAFs), and charitable remainder trusts.

Healthcare and Long-Term Care Planning in California

Rising healthcare costs make planning for future care vital. An advisor can help you:

• Explore Health Savings Accounts (HSAs) for tax-advantaged medical savings.

• Understand Medicare and Medigap options to cover healthcare gaps.

• Evaluate long-term care insurance to manage potential extended care costs.

Finding the Right Financial Advisor in California

Choosing the right financial advisor is an important step in preparing for retirement. With so many options available, knowing what to look for can help you select someone who truly supports you.

Key qualities to consider:

• Fiduciary responsibility: Work with an advisor who is legally obligated to act in your best interest. Ask how they are compensated and whether their recommendations are free from commission-based incentives.

• Experience: Look for someone who understands the challenges Californians face when nearing retirement, including local tax considerations and high living costs.

• Comprehensive services: Consider a firm that offers complete wealth management and legacy planning, with experience in retirement tax benefits in California, including RMD tax strategies.

• Client-focused approach: Select an advisor who listens to your concerns, takes time to understand your unique situation, and provides guidance you can feel confident in.

If the advisor or firm you’re working with doesn’t meet these four criteria, it may be best to keep looking.

Bulman Wealth Group offers the support of both our Roseville, CA financial advisor team and our financial advisor Temecula professionals. As fiduciaries, we are committed to acting in your best interest. With extensive experience, we take the time to understand your goals and guide you through every step, helping you move forward with more confidence.

Consider a Partnership With Bulman Wealth Group

Planning for retirement is a journey; having a dedicated partner can make it smoother and more manageable. The Bulman team is dedicated to helping you pursue your dream retirement, whether it be in California or elsewhere.

Our comprehensive financial planning approach, known as the Five Points of the Financial Compass, includes retirement income planning, investment management, tax planning, healthcare in retirement, and estate planning.

Have questions? Reach out today for a no-obligation conversation.