Retirement: Investment advice for every stage of life

Retirement planning is essential at every stage of life, but strategies vary depending on age. Judy Brown, SC&H Wealth Principal & Wealth Advisor, joins Wealth! to discuss age-specific retirement and investment planning strategies.

For pre-retirees, often in their "highest earning years," Brown recommends account diversification. This approach allows individuals to "manage their tax brackets in retirement." However, the strategy differs for younger adults who are typically just entering the workforce and often burdened with student loan debt.

"Mostly at that age it's about educating and helping these young people instill habits so that they can set themselves up for the long-term with financial success," Brown told Yahoo Finance. For older individuals, she advises mapping out "a lifetime tax-efficient strategy" to maximize benefits from 401(k)s or Roth IRAs.

Given that it is an election year is underway, Brown advises individuals focus on the long-term. "There's always gonna be volatility with this election, the next election... with anything that happens," Brown told Yahoo Finance, emphasizing that individuals so focus on their personal goals rather than timing the market.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video Transcript

29% of Gen. Z did not contribute to their retirement in 2022 and 2023 according to bank rate.

But not contributing might not be that bad.

At different life stages.

People might want to save for their future a little bit differently here to discuss retirement and investment strategies for all ages.

We have Judy Brown, CNH wealth principal and wealth advisor.

CNH Wealth is a consulting and financial services firm.

Judy, Thank you for joining us.

You say account diversification is key, especially when it comes to those pre retirees.

So how can you be diversified when when you're thinking about retirement?

Absolutely.

And, uh, pre retirees are usually in their highest earning years.

So we're looking for opportunities for them to do some, uh, tax planning and tax savings, which is important since they're in such a high tax bracket.

But we also want to prepare them for retirement and account.

Diversification is giving them a lot of different levers to pull when they get to retirement for income, so that we can also manage their tax brackets in retirement.

So that involves not only contributing to an IRA or traditional or a 401k, but we like to try to be able to maybe do some Roth convert if possible, um, or start saving in a brokerage account or an HS A.

So there's just a lot of different buckets than that you can leverage later on.

And it's not just those pre retirees.

We also have young adults, young adults, younger folks.

We have those that are retired.

How do those investment strategies change as you work across the various age groups?

Yeah, So when we have young, um, 20 something that are coming to us, it's actually a very exciting time.

They have a lot going on.

It's more complex than what you might think.

Um, they're usually graduated.

Maybe they have some student loan debt.

They're taking their first job.

They're not really familiar with what, uh, 401k is or how to get a match.

Sometimes they're in a low tax bracket, so a Roth might be contribute to the 401k to get a match and then switch to the Roth if they don't have a Roth 401k option.

So a lot of planning can go into that mostly at that age.

It's about educating and helping to, um instil habits, helping these young people instil habits so that they can set themselves up for the long term with financial success for retirees.

It's interesting in that once, hopefully we've done a lot of planning to get them there.

And, um, now we're looking at it almost becomes age based.

There's a lot of age milestones that we see for retirees.

Um, for instance, a lot of people think of Social Security at 62 but don't because they're still working or they wanna get a higher, uh, full retirement, uh, amount from their Social security.

Um, but then when they hit 65 they have Medicare.

Um, which is, uh, not all premiums are the same in Medicare.

They're driven by a modified adjusted gross income.

So again, we're integrating the the tax and the investment piece there.

And then, later on, um, we're looking at, um, required minimum distributions, which can start at 73 or 75.

So what?

This does from, uh, a financial planning and tax advice perspective.

It gives us a lot of, um, time to really map out a lifetime, uh, tax efficient strategy, not just one year, but it could be delaying Social Security till 70 makes sense so that we can do Roth conversions in those couple of years so that when they get to 73 or 75 they don't have a huge taxable event.

Start with very high required minimum distributions.

Yeah, it is interesting how those strategies change, the older you get even for those younger folks as well.

So what's the biggest mistake that you often see when it comes to early retirement planning?

Too early for people retiring early, or or even when they're starting that process of of of, you know, planning for their retirement and investing?

Yeah, I think a lot of times people don't believe they need the financial planning or even most of the integrated tax advice and financial planning until they even until they have a significant amount of assets or they have a complex tax return.

And as I mentioned, there's always There's always something even for a young person that we generally can tweak or find or advise on or do differently.

That's just going to especially over a long period of time, is gonna make significant differences in in them being able to meet their financial goals.

So I guess I would say that's probably the biggest mistake is kind of putting your head in the sand.

And, uh, it's hard.

It's hard for people to to look at it, and, uh, but as soon as you put a goal out there and you start working with someone and working on it, it it's amazing how you can get there more, Um, easily.

And and it's a more pleasant experience.

We have an election coming up in November.

We've already seen a lot of surprises so far.

Should you change your investment strategies or your retirement strategies savings plans in order to protect yourself from that potential volatility?

We are very much long term focused.

So we believe in, uh, the individual should or the clients should put together their plans, their goals.

And then we build around that there's always going to be volatility with this election the next election, Um, with you know, anything that happens, we see the volatility, and those are people that are out there trying to time the market with your retirement and your those goals.

You really don't wanna time the market.

Instead, you wanna be focused on what is your Do you have the proper asset allocation based on your specific goals?

Do you have your investments?

Um, broken up kind of between short term, intermediate and long term so that it's a proper risk profile for you.

And, um, you know, the timing of when you're gonna basically need the income, whatever it is that you want that income for and when we wanna be sure to align your, um, investment strategy with that corn.

Thanks to keep in mind.

Judy Brown, SCNH wealth principal and wealth advisor.

Thank you so much for joining us in studio.

Thank you.

Thank you for having me.