Spring brings a sense of renewal—trees bloom, homes get cleaned, and life feels refreshed. While organizing closets and clearing the clutter, have you considered doing the same for your retirement plan? Reviewing your finances can provide clarity and renewed confidence as you look toward the years ahead.

At Bulman Wealth Group, we offer decades of experience in retirement planning California residents can rely on, helping individuals and families make informed decisions to navigate the complexities of their later years.

This guide outlines practical steps to refresh and optimize your retirement finances so your plan supports both your goals and lifestyle.

Spring Cleaning Your Retirement Finances

Review Your Retirement Income Sources

Your retirement income forms the foundation of your financial stability. Reviewing each source annually can help you make wise decisions.

Social Security:

• Confirm your benefit estimates through the SSA website.
• Consider timing strategies—delaying benefits may increase monthly payments.
• Explore spousal or survivor benefits to maximize household income.

Pensions:

• Review payout options: lump sum or monthly annuity.
• Understand survivor benefits and how they affect your family’s future income.
• Revisit plan documents to confirm pension start dates and tax implications.

Retirement accounts:

• Review balances and investment performance in 401(k), 403(b), and IRAs.

• Consolidate old accounts to simplify management. Rolling over a 401(k) to an IRA typically has no tax consequences and can offer broader investment options and professional management.

• Consider opening a Roth IRA if you don’t have one. Roth IRAs offer tax-free growth and tax-free withdrawals in retirement.

• Explore self-employment retirement plans like SEP IRAs, SIMPLE IRAs, or Solo 401(k)s if you’re self-employed. These plans allow higher contribution limits and potential tax benefits.

• Take advantage of contribution deadlines. You can contribute to IRAs and self-employed retirement plans (e.g., SEP IRAs) until April 15 or the extended tax deadline. Contributions made by then can apply to the prior year, boosting savings and reducing taxable income.

Address California-Specific Tax Considerations

California taxes most retirement income, including distributions from 401(k)s, IRAs, and pensions. Proactive tax planning can help you better manage annual income needs and reduce your overall tax burden. Consider these tax-efficient strategies.

Tax diversification: Maintain a mix of taxable, tax-deferred, and tax-free accounts to increase flexibility. Carefully choosing which accounts to withdraw from can significantly affect your tax bill.

Asset placement: Different investments are taxed in various ways. Placing higher taxed assets in tax-deferred accounts while holding tax-efficient investments in taxable accounts can improve tax efficiency.

Investment selection: Consider investments with favorable tax treatment. Holding assets for over 12 months qualifies them for long-term capital gains rates, typically lower. Also, certain stocks pay qualified dividends taxed at reduced rates, helping to lower your overall tax burden.

Municipal bonds: California municipal bonds and muni money market funds can offer tax-free income at both the state and federal levels, making them a valuable option for generating income without increasing taxable income.

Long-Term Care Planning in California

No one likes to think about needing long-term care, which is why many people put off planning. Some assume their children will care for them or that their savings will be enough. However, caring for aging parents is a significant responsibility, and depending on the level of care required, it may not be feasible for family members.

Long-term care is expensive, and government assistance typically only becomes available once most assets are depleted. Planning ahead can help manage these potential costs and ease the burden on loved ones. Options include:

• Long-term care insurance: Helps cover the high costs of nursing homes, assisted living, or in-home care, preserving more of your retirement savings.

• Hybrid insurance policies: Combine life insurance or annuities with long-term care benefits, offering flexibility if care is needed.

• Personal savings: Setting aside funds can be a solution if insurance isn’t an option, though it may require significant planning.

A Bulman financial advisor in California can help you weigh the pros and cons of these strategies and determine what fits your situation best.

Estate and Legacy Planning

Spring is a great time to review your estate plan. Key areas to revisit include:

• Wills: Specify asset distribution but require probate, which can be time-consuming and costly.

• Trusts: Help direct asset transfers and may bypass probate, saving time and money for your heirs.

• Power of attorney: Assign someone to make medical or financial decisions if you’re unable—choose carefully.

• Legacy planning: Strategies like charitable giving or donor-advised funds can support causes you care about while reducing potential estate taxes.

Bulman provides personalized guidance in wealth management and legacy planning to help you navigate these important decisions.

Understanding RMD Withdrawal Strategies

Retirees aged 73 and older must take Required Minimum Distributions (RMDs) from traditional IRAs and certain employer-sponsored retirement plans. Missing an RMD can result in significant penalties, making careful planning essential.

Key strategies to manage RMDs:

• Roth conversions: Shifting funds to a Roth IRA can reduce future RMD obligations.

• Spreading withdrawals: Taking distributions throughout the year can help manage cash flow and limit the effects of market fluctuations.

• Qualified Charitable Distributions (QCDs): If you’re 70½ or older, donating directly to a qualified charity through a QCD can meet RMD requirements without increasing taxable income.

The team at Bulman Wealth Group can assist with retirement tax benefits in California and guide you through RMD tax strategies specific to your needs.

Next Steps: Partnering With Bulman Wealth Group

Spring cleaning your retirement plan is a chance to revisit financial goals, refine strategies, and prepare for future challenges. While self-review is helpful, working with experienced professionals can provide deeper insights and tailored solutions.

Our team offers guidance focused on your unique financial journey. We’ll help you with:

• Personalized planning: Understand your income needs, lifestyle goals, and risk preferences.

• Tax-smart strategies: Use tax-efficient investments to help minimize unnecessary taxes.

• Legacy-focused guidance: Develop comprehensive estate and legacy plans to pass assets to family or causes you value.

• Local expertise: Our Roseville, CA, financial advisor team and financial advisor Temecula professionals understand California’s tax landscape.

Contact us today to schedule a consultation and gain more clarity on your next steps toward greater financial confidence California residents like you deserve.