Ask an Advisor: How can I improve my financial security as I near retirement with $2 million in savings from a pharmaceutical career?

Ask an Advisor: I’m about 1-4 years away from retirement, with over $2 million in savings and investments. I’m a Senior Operations Director in the pharmaceutical industry, and I feel somewhat confident in my long-term plan. However, I’d like an advisor’s perspective to ensure I’m fully prepared. What steps can I take to improve my financial security as I approach retirement?

It’s fantastic that you’re planning ahead—being proactive now can make a real difference in retirement. With $2 million in savings, here are a few strategies to consider as you approach this milestone:

1. Optimize Asset Allocation and Diversification: A well-balanced portfolio is key. Our approach emphasizes diversification across broad asset classes to help manage risk and volatility without lowering expected returns—one of the most effective strategies available to investors. Balancing growth assets (like stocks) with more stable investments (like bonds) can help achieve your target risk/reward profile. An overarching strategy across all accounts (excluding liquidity accounts, like your checking account) keeps everything aligned to your goals. Please understand the asset allocation and diversification does not guarantee a profit or protect against losses. For more on our approach, you can explore our services.

2. Set a Tax-Efficient Income Strategy: Success in retirement hinges on managing the sequence of withdrawals. Starting with taxable accounts, then moving to tax-deferred, and finally to tax-free accounts helps to minimize taxes over time. We also consider Roth IRA conversions and other tax-efficient distribution strategies to help ensure that more of your returns stay with you.

3. Focus on Low Fees: Fees create a certain drag on portfolio returns, so reducing them is essential. We prefer ETFs because of their low fees, high liquidity, and minimal capital gains distributions, which make them an efficient choice for investors seeking to minimize cost and maximize their investment’s potential. To learn more about fee efficiency and our insights on market trends, visit our Monthly Market Commentary.

4. Tax-Efficient Investment Placement: Tax efficiency measures how much of an investor’s return remains after accounting for taxes. Our goal is to strategically place investments that generate the most taxes in accounts with the lowest tax impact. This might include Roth IRA conversions, maximizing contributions to tax-deferred and tax-free accounts, or implementing backdoor Roth strategies where applicable.

5. Self-Insurance for Long-Term Care: Planning for long-term care costs in retirement is an important goal we set for all clients. Evaluating whether your current savings are sufficient to self-insure against long-term care costs can help ensure that your assets are protected, allowing you to be prepared without depending on specific insurance products.

6. Estate Planning: Laura Weyant Kearney, Esq., emphasizes the importance of having an up-to-date estate plan, especially as retirement approaches. “Having a clear structure for transferring wealth not only provides peace of mind but also helps minimize potential tax burdens on your heirs. It’s an important step to protect your legacy and ensure that your wishes are honored smoothly and efficiently.” You can learn more about Laura’s work in estate planning on her website*.

For additional insights into financial planning and investment strategies, you might also find our AdvicePeriod Blog useful.

Bringing in a fresh perspective on these areas can often reveal subtle changes that bring extra security and peace of mind. Just a few adjustments can help you feel fully prepared as you step into retirement!

*Mariner/AdvicePeriod have no affiliation with Laura Weyant Kearney. The information and third party link is provided for informational purposes only. This material is provided for information and educational purposes only. It does not consider any individual or personal financial, legal, or tax circumstances. As such, the information contained herein is not intended and should not be construed as individualized advice or recommendation of any kind. Where specific advice is necessary or appropriate, individuals should contact their professional tax, legal and investment advisors or other professionals regarding their circumstances and need.

Any opinions expressed herein are subject to change without notice. The information provided herein is believed to be reliable, but we do not guarantee accuracy, timeliness, or completeness. It is provided “as is” without any express or implied warranties.

There is no assurance that any investment, plan, or strategy will be successful. Investing involves risk, including the possible loss of principal. Pas performance does not guarantee future results, and nothing herein should be interpreted as an indication of future performance.

AdvicePeriod is a brand utilized by Mariner Platform Solutions (“MPS”). Investment advisory services are offered through Investment Adviser Representatives (“IARs”) registered with MPS, an SEC registered investment adviser. For additional information about MPS, including fees and services, please contact MPS or refer to Form ADV Part 2A, which is available on the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov)/ Registration of an investment adviser does not imply a certain level of skill or training.

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This article was originally published on Wealthtender and is intended for informational purposes only and should not be considered financial advice. You should consult a financial professional before making any major financial decisions. Wealthtender earns money from financial professionals, which creates a conflict of interest when these professionals are featured in articles over others. Read the Wealthtender editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.

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