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Retirement Planning Guide

Understanding Retirement

Like most, you work extremely hard throughout your career with the goal of obtaining the financial security necessary to live an enjoyable lifestyle in retirement. Geier Asset Management provides specialized attention and support as you approach retirement by identifying your goals and developing a strategy to adequately position you for your target date. Here, you’ll find an array of resources, strategies, and tips to plan for your best retirement. If you have any questions about your road to a financially stable retirement, please reach out to our team. It’s never too early to start planning-your future is our business.

When Can I Retire?

The ability to retire is very situational—each person’s financial situation, lifestyle, and future goals will be different. However, understanding your current financial landscape and identifying the type of lifestyle you wish to have in retirement are great starting points. Once you have a clear understanding of how much money you will need to live comfortably in retirement, you can run long-term asset projections to determine how your current asset base must grow as you approach the end of your career. Adding factors such as retirement income (pension, social security, and investment), expenditures, rate of return, and inflation to the projection allow you to determine a concrete, financially feasible timeframe for retirement.

How Much Should I Save?

A retirement savings plan is essential. Your goals, objectives, and overall lifestyle in retirement will dictate your course of action in the interim. After defining those factors, you can determine how much money you’ll need at your retirement age. A strategy is devised and implemented to achieve your asset level by the target date. Age, current assets, current income and expenses, and expected rate of return of your portfolio are key factors in determining how much to incrementally save. The final, and often overlooked, influence on integrating a savings plan within a long-term retirement projection is taxes. Income taxes may limit your ability to contribute to your portfolio. Capital gains tax along with taxes on your interest and dividends may hinder the growth of your savings. Therefore, you must incorporate tax planning into your saving strategy.

Retirement Account Types

Breakdown of Retirement Accounts


401(k) and 403(b)

Advantages: Tax deferred growth. Deferrals no subject to current year income tax.
Disadvantages: Subject to income tax and 10% penalty if withdrawn prior to age 59.5.

Traditional IRA

Advantages: Tax deferred growth. Potentially income tax-deductible.
Disadvantages: Subject to income tax and 10% penalty if withdrawn prior to age 59.5.

Roth IRA

Advantages: Tax-free growth. Access to principal.
Disadvantages: No current year income tax savings. Must be held for 5 years.

Social Security

Advantages: Provides fixed income while retired. Annual, fixed-growth rate if you wait to collect.
Disadvantages: Portion may be subject to income tax. Future legislated changes could impact benefits.


Advantages: Provides fixed income while retired. Part of employer paid benefit plan.
Disadvantages: Portion may be subject to income tax.

Retirement Accounts: Taxes, Penalties & Limits

401(k) and 403(b) Taxed in retirement (after age 59.5) 10% penalty on withdrawals prior to age 59.5 Up to $19,500/year

Up to $25,000 if over age 50

Most tax beneficial for high income earners
Traditional IRA Taxed in retirement (after age 59.5) 10% penalty on withdrawals prior to age 59.5 Up to $6,000/year

Up to $7,000 if over age  50

Often, traditional IRA contributions are tax deductible, which would be most beneficial to high income earners. Tax deferred growth is equally valuable to all investors
Roth IRA No immediate tax deduction and funds grow tax-free. 10% penalty on earnings prior to age 59.5 Up to $6,000/year

Up to $7,000 if over age  50

Best suited for younger investors with a long time horizon. Also suited for investors in lower, current income tax brackets who would not benefit as much from an immediate tax deduction

Investment Strategies

For Baby Boomers

Baby boomers should begin to scale down the risk in their portfolio as their income earning years are either complete, or nearing the end. The time horizon for investment is shorter as well. Therefore, shift the strategy from growth and accumulation to capital preservation and income. In an effort to make the portfolio more conservative, you could transfer a portion of their equity holdings to fixed income. In addition, you should allocate the remaining equity exposure move heavily into large cap, blue chip stocks, with a focus on dividend income. Traditional, deductible IRA’s may be appropriate to fund as you will likely be in a higher income tax bracket and a condensed investment timeline as you enter retirement.

For Middle Years

In this demographic, you are typically in your peak earnings years. Your timeline for retirement is 10-20 years, so you have the ability to invest more aggressively than a boomer. You are in the growth stage of the investment cycle, as you have likely accumulated a good foundation for your investment portfolio. You should build a moderately, aggressive, balanced portfolio. The asset allocation will be approximately 60-70% in equities with the balance in fixed income and alternative investments. Some exposure to small and mid-cap equities is present. A traditional, deductible IRA or a Roth IRA could make sense, depending on your specific financial situation.

For Millennials

A younger generation of business professionals has an extended investment timeline, usually 30-40 years. You are in the accumulation phase of their investment cycle, where saving as much as possible is the main priority. Due to the substantial time horizon, you should be more aggressive with your portfolio allocation as short-term volatility is not a major concern. You should weight these portfolios primarily to equities, typically in the 80-85% range. Heavier allocations to small, mid cap, and international stocks is likely. Usually, Roth IRAs are most suitable as income tax brackets are lower and the time horizon for tax-free growth is significant.


Investing for yourself as a self-employed individual can vary based on your age, risk tolerance, and specific financial situation. Your allocation to equities and fixed income would be similar to various scenarios listed above. However, one specific area that affects self-employed individuals is self-employment tax. To reduce this tax levied exclusively to self-employed individuals, the funding of a retirement plan, often a SEP IRA, is used. Contributions are deductible against self-employment income and grow tax-deferred until retirement.

Taxes & Retirement

Asset allocation, fund manager selection, understanding current economic conditions, and regular rebalancing are essential to the long-term growth of your portfolio. However, one additional factor that must be taken into consideration when maximizing your return on taxable accounts is taxes. If investment related taxes as a result of capital gains and interest/dividends can be minimized or eliminated, your portfolio returns can compound exponentially. Capital gains tax results when an asset is sold at a profit. The profit is subject to capital gains tax rate, which varies based on how long the asset was owned. If held for less than one year, the gains are taxed at ordinary income rates, which can approach 50% in the highest federal and state brackets. In addition, taxes on interest from bonds and dividends from stocks, can limit your overall rate of return.

Minimizing Taxes

The best way to avoid the adverse effect of taxes on your portfolio is to maximize your contributions to retirement vehicles such as 401(k), 403(b), and IRA’s. Capital gains, interest, and dividends are not subject to income tax if held within a retirement account. This will allow your portfolio compound more rapidly. The caveat to investing in these tax-advantageous accounts is the limitation placed on contributions. In a 401(k) or 403(b), you can only contribute $19,500 per year. In an IRA, the limit is $6,000. If you are over age 50, the limits are increased to $7,000. However, many investors need to save more than the allowable amount in order to fund their retirement. Due to these contribution limitations of retirement accounts, investors must save for their future using taxable accounts. As we’ve illustrated previously, there can be significant and relatively detrimental tax implications that hinder overall performance and growth of your portfolio. However, simple tax planning can help mitigate the tax risk associated with your investments. Having a long-term outlook and time horizon is an important first step.



If you hold an asset for longer than a year before selling at a profit, you will only be subject to capital gains tax, which is a reduced rate. If the asset is held for less than a year, the gain is taxed an ordinary income tax rates, which could be nearly 40% on the federal side plus state tax obligations.



Holding a position for more than 60 days during the 121 day period that begins 60 days before the ex-dividend date will make the dividend payment of the stock “qualified.” Qualified dividends are only subject to that tax-friendly, long term capital gains rate.



The interest on these types of bonds is exempt from federal income tax. If you purchase a municipal bond in your state of residence, the bond is excluded from state income tax as well. For example, a Maryland resident taxpayer in the highest tax bracket who buys a muni bond issued in Maryland could then preserve over 45% of the bond interest payment.

Starting Early

Investment Strategies

The best way to ensure that your retirement is funded at a level where you and your family can live comfortably is to start saving EARLY. Contribute to your company 401(k), fund a Roth IRA, and take any remaining dollars and begin building a taxable portfolio. Setting up automatic contributions has been an effective mechanism for our younger clientele. Having a certain dollar amount automatically deducted from their checking account and invested on a monthly basis streamlines the savings process. In addition, monthly contributions expedite the compounding process.

For example, assume you began investing at age 20 and initially deposited $1,000 into your Roth IRA and contributed $100 per month ongoing. At age 40 with a 7% rate of return, your account would be worth $56,508. Of that $56,508, $24,000 is contributions you’ve made over the years and the balance ($31,508) is earnings.

If you continued that measly $100 per month for 30 years, your account would be worth $128,900. Extend it 40 years, which takes to you age 60 when you can access retirement funds, and your account would be worth $271,306. Not bad for starting with $1,000 and only contributing $100 per month from your paycheck. Imagine how large your portfolio would be if the initial deposit was greater or you increased your monthly contribution to $500 or $1,000!

These examples illustrate the power of automatic saving, compounding growth, and the impact that tax-free growth (Roth IRA) can have on your portfolio and subsequently, your ability to retire.

Frequently Asked Questions


Coordinating your estate plan with your retirement goals is an important exercise to undergo. If you have built a significant wealth that will be difficult to spend down, estate taxes may become an issue at death. If your retirement goals include funding trusts for grandchildren or donating substantial money to charity, specific estate planning can be done to remove these assets from your estate. Ideally, between the drawdown of assets for your retirement living and the seclusion of funds to the aforementioned beneficiaries and charities, your estate will fall below the estate tax threshold and your assets will be


Health insurance in retirement is an expense in retirement that often goes overlooked by retirees. Coverage for you and your family prior to Medicare eligibility can be costly and must be factored into retirement planning as a major expense. Also, a supplemental policy may be needed in conjunction with the medical benefit offered by Medicare. Life insurance can serve multiple needs in retirement. First, it can provide debt protection and education funding for spouses and children, or it can be used in legacy planning to support your grandchildren and charitable endeavors. In addition, life insurance may be used as an estate planning tool for ultra-high net worth individuals.


Registered investment advisors provide you with the necessary financial knowledge and expertise without a bias or a commission incentivized approach. Whether you are a young professional looking to lay the foundation for your financial path or a baby boomer preparing for retirement, financial advisors can identify and execute a plan that will aid you in achieving your goals. A comprehensive firm that provides oversight to your portfolio, while providing financial and tax planning guidance along the way ensures the proper attention is given to your full financial picture.


Ensuring that your money lasts your lifetime is no easy feat. Extensive planning throughout your entire life will increase the chances that your money will last into and through retirement. Three important areas for you to consider are (1) setting a budget, (2) allocating extra money to your portfolio, and (3) proper and ongoing investment management. First, set a detailed budget for yourself. Within the budget, allocate a certain amount of your earned income to fund your investment accounts, both liquid and retirement. Then, be sure to manage the portfolio to match your risk tolerance, goals, and time horizon. If you feel you unqualified to handle this important responsibility, seek the assistance of a financial advisor, preferably a registered investment advisor (RIA) or Certified Financial Planner (CFP®).


To determine the allocation of your company 401(k) or 403(b), you should first start by identifying your risk tolerance level, your long-term goals for the portfolio, and your general time horizon for investment. From there, do an analysis of the investment options on your company specific platform. Review the historical performance and risk metrics of each fund relative to their peers to determine which fund managers are historically the best. Then, allocate the best funds in an appropriate asset allocation (stocks vs. bonds). Target date funds are an alternative for those who feel uncomfortable handling the analysis required to effectively allocate their account. These mutual funds are allocated based on your expected year of retirement. The downside to this option is your allocation is based solely on age, rather than the current market environment. Seeking asset allocation assistance from a qualified advisor is typically your best option over target date funds.

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Who We are

Meet our dedicated and experienced team at Geier Asset Management. We handle tax planning, investment management, financial planning, and retirement plan services for clients nationwide.
Joseph N. Geier, CPA

President/Client Manager
Brian Woods

Vice President/Client Manager
Gregory Palacorolla, CFP®

Director, Wealth Management
Daniel Mules, CPA

Client Manager
Brendan Winkler, CPA

Portfolio Accountant
Deborah Kresslein

Portfolio Administrator
Julie Keller

Executive Assistant