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How to Plan for RMD Taxes in Retirement (2026)

Sun, 27 Sep 2026 12:09:31 GMT

Required minimum distributions (RMDs) can create a tax problem because withdrawals from traditional IRAs and 401(k)s are generally taxable income, even when you do not need the money. Planning ahead can help you coordinate RMDs with Social Security, investments, charitable giving, Roth conversions, and other retirement income decisions.

What are RMDs, and why can they raise your taxes?

Required minimum distributions are annual withdrawals that many owners of traditional retirement accounts must begin taking after reaching a specific age. The amount is generally calculated using your account balance and an IRS life-expectancy factor.

RMD rules can apply to:

Traditional IRAs
SEP IRAs and SIMPLE IRAs
Most 401(k), 403(b), and other workplace retirement plans
Inherited retirement accounts, depending on the beneficiary and circumstances

Roth IRAs generally do not require withdrawals during the original owner’s lifetime. However, Roth 401(k) rules and inherited Roth accounts can differ, so your account type and personal situation matter.

The important issue is that an RMD is usually included in taxable income. It may increase your federal income tax, affect your tax bracket, raise taxes on part of your Social Security benefits, and influence Medicare Part B and Part D premiums through income-related monthly adjustment amounts.

An RMD can create a tax problem even when your investment account has performed well or when you do not need additional cash. The money still may have to leave the tax-deferred account and be reported as income.

When do RMDs begin?

The starting age depends on your birth year and current tax law. Recent legislation changed the schedule, and future changes are possible. The first RMD deadline can also differ from the deadline for later years.

For that reason, do not rely only on a general rule of thumb. Confirm your required beginning date with your tax professional, plan administrator, or financial advisor. Missing an RMD or taking too little can result in a penalty, although correction rules and penalty relief may apply in some situations.

If you have multiple traditional IRAs, the calculation and withdrawal process can have specific rules. Employer plans may need to be handled separately. A written distribution calendar can help you avoid last-minute decisions and missed deadlines.

The tax issue many retirees overlook

Retirees often focus on the size of their portfolio, but the account location can be just as important. A large balance in tax-deferred accounts may represent future taxable income rather than completely spendable wealth.

Suppose you have income from several sources:

Social Security
A pension
Interest and dividends
Withdrawals from investment accounts
Required minimum distributions

When these sources arrive together, an RMD may push your total income higher than expected. That can affect your marginal tax rate and the amount of income that remains available for spending.

The effect can also continue beyond one tax return. Higher income in one year may affect Medicare premiums later because Medicare commonly uses information from a prior tax year. It may also influence how much of your Social Security benefit is taxable.

How can you plan ahead for RMD taxes?

The best approach is usually coordinated planning rather than waiting until an RMD is due. Consider these strategies with the appropriate financial and tax professionals.

1. Project future income

Estimate future RMDs before they begin. Review current account balances, expected investment growth, pension income, Social Security, and planned withdrawals. A multi-year projection can show whether future RMDs may create unusually high-income years.

Use a range of assumptions rather than relying on one forecast. Markets change, spending changes, and tax laws may be revised. The goal is not to predict the future perfectly; it is to identify decisions that may deserve attention now.

2. Evaluate partial Roth conversions

A Roth conversion moves money from a traditional retirement account into a Roth account. The converted amount is generally taxable income in the year of the conversion, but qualified Roth withdrawals may receive different tax treatment later.

Conversions can be considered during lower-income years, such as after leaving work but before RMDs begin. They are not automatically beneficial. A conversion could increase current taxes, affect Medicare premiums, or create other consequences.

A useful analysis compares the cost of paying tax today with the potential value of reducing future tax-deferred balances. Your tax professional can help evaluate the conversion amount and its effect on your broader return.

3. Coordinate withdrawals across accounts

You may have taxable brokerage accounts, traditional IRAs, Roth accounts, cash reserves, and workplace plans. The order and timing of withdrawals can affect taxes and portfolio risk.

Instead of taking the same percentage from every account, consider how each withdrawal fits your income needs and tax situation. A coordinated plan may help you manage taxable income while preserving flexibility for later years.

This is one reason comprehensive retirement planning can be useful. RMDs should be considered alongside spending, investments, Social Security, healthcare costs, and estate goals.

4. Consider qualified charitable distributions

If you are charitably inclined and eligible, a qualified charitable distribution may allow money to move directly from an IRA to a qualified charity. When properly completed, it can satisfy all or part of an RMD and may be excluded from taxable income, subject to applicable rules and limits.

A qualified charitable distribution generally must be paid directly from the IRA to the eligible organization. Taking the distribution personally and donating it later may not produce the same tax treatment. Confirm the process before requesting a transfer.

5. Review beneficiaries and account structure

RMD planning is also part of legacy planning. Beneficiary designations, account types, ownership, and distribution rules can affect the tax experience of a surviving spouse or other heirs.

Review beneficiaries after major life events such as marriage, divorce, death, or a change in your estate plan. You can learn more about coordinating these decisions through estate and legacy planning .

What mistakes should retirees avoid?

Several common mistakes can make RMD planning more difficult:

Waiting until December to decide how much to withdraw
Assuming an RMD is optional because you do not need the cash
Forgetting an old 401(k) or IRA from a former employer
Treating all retirement accounts as if they follow identical rules
Completing a Roth conversion without estimating the full tax effect

Another mistake is focusing only on this year’s tax bill. A strategy that lowers taxes today may create more taxable income later, while a strategy that increases taxes today may improve future flexibility. The right decision depends on your timeline, income, account balances, goals, and risk tolerance.

A practical RMD planning checklist

Before your next tax-planning conversation, gather:

Current statements for every IRA and employer retirement account
Your expected Social Security, pension, and other income
Prior-year tax returns and estimated withholding
Medicare premium information, if applicable
Charitable giving plans and beneficiary designations

Then ask your advisor and tax professional:

When do my RMDs begin?
How much might they be under several reasonable scenarios?
Could future RMDs affect my tax bracket or Medicare premiums?
Should I evaluate Roth conversions, charitable distributions, or a different withdrawal sequence?
How do these decisions fit my investment and estate plans?

How can Coast Wealth Management help?

RMD planning is most effective when it is connected to the rest of your retirement plan. Coast Wealth Management Group works with pre-retirees and retirees in Myrtle Beach, the Grand Strand, and throughout South Carolina to organize decisions around income, investments, taxes, Social Security, and legacy goals.

Our process is designed to make complex choices easier to understand. We can help identify questions to discuss with your tax professional, evaluate how account types fit together, and build a retirement income strategy that reflects your needs. We do not guarantee tax savings or investment results, and every recommendation depends on your circumstances.

If you are approaching RMD age or already taking distributions, schedule a complimentary retirement review to discuss what deserves attention now.

Frequently asked questions about RMD tax planning

Are RMDs always taxable?

RMDs from traditional tax-deferred accounts are generally included in taxable income. The treatment can vary for different account types, after-tax contributions, inherited accounts, and qualified charitable distributions. Ask a tax professional to review your records.

Can I reinvest an RMD?

If you do not need the money for spending, you may be able to invest it in a taxable account after taking the required distribution and addressing applicable taxes. It still generally counts as income in the year distributed.

Can I delay an RMD if I am still working?

Some workplace plans may allow certain employees to delay RMDs while still working, but rules can differ and an ownership exception may apply. Traditional IRAs generally follow different rules. Confirm your eligibility before delaying a distribution.

Should I take an RMD early in the year?

There is no universally best timing. Taking it early may reduce the chance of missing a deadline, while waiting may allow more time for funds to remain invested. Your cash needs, market exposure, tax withholding, and overall plan should guide the decision.

Key takeaways

RMDs can create a tax problem because required withdrawals may increase taxable income even when you do not need the money. The most useful planning often happens years before the first distribution.

Review future income, account balances, Roth conversion opportunities, charitable giving, withdrawal order, Medicare considerations, and beneficiaries together. If you are nearing RMD age, gather your account and tax information and discuss a multi-year strategy with your financial advisor and tax professional. Start early, compare options, and choose an approach that supports your retirement income and legacy goals.

Building a Cash Reserve Account

Fri, 14 Aug 2026 18:32:16 GMT

Building a Strong Cash Reserve Account

Emergency borrowing always comes at a high cost. Credit cards can charge interest rates north of 20%. Early 401(k) withdrawals carry a 10% penalty — plus income taxes. Having a dedicated cash reserve is the simplest way to protect yourself from falling into expensive debt when life throws you a curveball.

The good news? Building a solid cash reserve can be faster (and easier) than you think.

How Much Should You Save?

The traditional rule of thumb is to aim for three to six months of take-home pay.

Another smart method is to total your essential expenses for the year (housing, food, insurance, transportation) and divide by four for a three-month goal.

Saving based on take-home pay, however, provides an even bigger cushion. It ensures you can continue your current lifestyle without scrambling to cut expenses during a crisis — and gives you some breathing room for surprises you might not have planned for.

Why You Should Keep It Separate

It’s tempting to “earmark” part of your regular savings or checking account as your emergency fund.

But it’s far better to open a dedicated high-yield savings account or money market fund — something separate from your daily spending.

Not only will you earn more interest (helping you reach your goal faster), but separating the funds reduces the temptation to dip into them. Look for an account that’s not tied to checks or a debit card to keep things growing quietly in the background.

Getting Started: Set It and Forget It

The easiest way to build your reserve is with automatic recurring deposits. Set a realistic, slightly aggressive contribution that comes directly from your paycheck.

Tip: Start with a number you’re comfortable with — and then increase it by 10%.

This way, you set the momentum early without constantly needing to adjust your deposit amount month after month.

If you find yourself too tight on cash after a few months, it’s fine to dial it back slightly. But most people discover that limiting their available spending cash naturally leads to better financial habits without much sacrifice.

How to Accelerate Your Savings

Unexpected windfalls like tax refunds, bonuses, or cash gifts are perfect opportunities.

Celebrate by using up to 10% for a personal splurge — then commit the rest directly to your cash reserve.

With a few smart moves like this, you’ll be surprised how quickly your safety net grows.

Final Thoughts

Whether you call it an emergency fund, rainy day fund, or cash reserve, having a financial buffer is one of the smartest money moves you can make.

It protects you from expensive debt, keeps your retirement plans on track, and ensures you can recover from life’s setbacks with minimal disruption.

Want an even better way to grow your cash reserve?

At Coast Wealth, we offer access to a cash reserve account currently yielding over 4% (subject to change). It’s a smart, secure way to make your money work harder for you while keeping it accessible for when you need it most.

Financial Planning in Myrtle Beach: Preparing for Market Volatility in 2025

Fri, 14 Aug 2026 18:19:10 GMT

Planning for Potentially Higher Volatility in 2025: How to Stay Financially Resilient

As 2025 unfolds, investors across Myrtle Beach, Charleston, Wilmington, and the broader Coastal Carolina region are keeping a close eye on potential market shifts. Strong financial planning is key to a solid plan. After a strong finish to 2024—marked by healthy stock and bond returns, inflation cooling below 3%, and GDP growth over 3%—many are wondering: what’s next?

Although the past year avoided sustained volatility, 2024 still delivered a few sharp single-day market swings. With a new presidential administration taking shape and policy changes likely on the horizon, greater market volatility in 2025 is a real possibility.

Understanding the forces that could drive uncertainty—and knowing how to stay disciplined—will be key to protecting your long-term financial goals.

Potential Policy Shifts and Market Reactions

Markets are influenced as much by expectations as by actual events. As the new administration’s agenda becomes clearer, several factors could potentially impact the economy:

Labor Market Adjustments: Changes to immigration policies could tighten the labor market, potentially driving wages—and inflation—higher.
Tariffs: New or increased tariffs could slow economic growth and may reignite inflationary pressures by making imported goods more expensive.

While these scenarios are not guaranteed to occur, markets dislike uncertainty. Even speculation around major policy changes can create turbulence.

For investors throughout South Carolina and the Grand Strand area, being prepared—rather than reactive—is the best defense.

Building a Strong Financial Foundation Amid Volatility

Regardless of how markets behave in the short term, it remains important to stay consistent with your savings and investment habits.

Some financial strategies to consider:

Maximize Tax-Advantaged Accounts:
401(k)s and IRAs allow for tax-deferred growth and may reduce taxable income today.
529 college savings plans offer tax-free growth and potential South Carolina state tax deductions.
Health Savings Accounts (HSAs) offer a triple tax advantage—contributions reduce taxable income, earnings grow tax-free, and qualified withdrawals are also tax-free.
Practice Do llar-Cost Averaging:

Investing at regular intervals helps smooth out the effects of short-term market fluctuations, a valuable strategy during volatile periods.

Maintaining a long-term focus is critical, especially for retirement planning, educational savings, and future healthcare needs.

Diversification: The Key to Reducing Risk

In a potentially volatile environment, diversification becomes even more important.

Ways to help manage risk include:

Balanced Risk Exposure:

Diversifying between higher-risk and lower-risk investments can help create a portfolio that is more resilient to market swings. Some investors also explore options such as private market investments or alternative assets, which historically have lower correlation with public stock markets.

Asset Allocation Across Sectors and Regions:

Spreading investments across sectors like technology, healthcare, consumer goods, and across domestic and international markets, can help protect against concentrated risks.

Clients we work with in Myrtle Beach, Charleston, Wilmington, and beyond often benefit from tailored asset allocation strategies that match their individual risk tolerance and financial goals.

Staying Focused on Long-Term Goals

It’s natural to feel uneasy when headlines turn negative or when account balances fluctuate. However, long-term financial success often hinges on staying the course during periods of uncertainty.

A helpful perspective: Will this market movement matter in five years?

History shows that markets recover over time. Investors who stick to a well-thought-out plan tend to fare better than those who make emotional decisions based on short-term events.

If your goals haven’t changed—whether that’s retiring comfortably in Myrtle Beach, funding a child’s education, or building generational wealth—your investment strategy likely doesn’t need major adjustments either.

Final Thoughts: Stay Prepared, Stay Calm

Volatility is a normal part of the investment journey. The so-called “fear index” (VIX) often rises during uncertain times, but fear doesn’t have to drive your decisions.

Here’s what you can focus on instead:

Maintain disciplined savings habits.
Review your budget and spending.
Keep a diversified investment mix aligned with your goals.
Seek p rofessional guidance if you’re unsure about your financial plan.

By preparing now, you can navigate 2025 with greater confidence—no matter what the markets bring.

At Coast Wealth , based in Myrtle Beach and serving Charleston, Wilmington, and all of Coastal Carolina, we specialize in helping individuals and families build resilient financial plans that stay strong through every market cycle.

Ready to review your strategy for 2025 and beyond?

2025 Retirement Savings Contribution Limits

Fri, 14 Aug 2026 17:44:27 GMT

2025 Retirement Savings Contribution Limits

The IRS has increased the contribution limits for many retirement savings plans. In 2025, 401(k)s, 403(b)s, governmental 457 plans, and the Thrift Savings Plan for government employees and the armed services will see an increase to $23,500, from $23,000. The catch-up provision for savers ages 50 to 59 remains the same, $7,500, for a total of $31,000. A higher catch-up contribution limit of $11,250 applies to savers ages 60 to 63 under the SECURE Act 2.0.

Adding to Savings with an IRA

The contribution limit for IRAs remains $7,000 for 2025. The phase-out ranges also got a cost-of-living bump. These determine whether and how much of your IRA contribution is tax-deductible.

For 2025, the phase-out ranges are as follows:

For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $126,000 and $146,000, up from between $123,000 and $143,000.
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $236,000 and $246,000, up from between $230,000 and $240,000.

Even if you can’t take the tax deduction, putting additional money into an IRA when you’ve maxed out your employer-sponsored plan can still be a terrific way to build retirement savings, without adding to your tax burden. IRA contributions grow tax-free, so you’ll have the benefit of being able to put your money to work without having to worry about capital gains taxes in the account, the way you would if you were saving in a taxable brokerage account.

You’re responsible for notifying the IRS that you’ve made an after-tax contribution. You do this by filing Form 8606. You’ll also need to keep careful records, or you may end up getting double-taxed when you withdraw funds in retirement.

The Spousal IRA

Whether you are eligible to take a tax deduction or not, if one spouse doesn’t have earned income it can make sense to set up a spousal IRA. This is just a regular individual IRA account held in the name of the spouse. The IRS requires income to contribute to an IRA, and the spousal IRA is the exception to that provision.

You may contribute up to the limit annually and can also make the catch-up contribution if over 50. The contribution limit remains at $7,000 in 2025. The catch-up contribution was amended under the SECURE Act 2.0 to include an annual cost-of-living adjustment, but remains unchanged at $1,000 for 2025. Continuing to contribute during periods when one spouse is not in the workforce allows for retirement savings to continue to grow, keeping retirement plans on track.

The Takeaway

Planning your retirement saving out in advance is a good way to make sure you are getting the most benefit. Reviewing your budget annually and adjusting your payroll contributions is a great way to ensure that your savings amount stays current with your income. Any increases in salary or decreases in other expenses such as paying down debt, may mean that you can increase retirement contributions. You can set up automatic deposits into an IRA so that you keep up a consistent cadence there too, which can give you the benefit of dollar-cost averaging into the market, as well as avoiding writing a bigger check at tax time.

New Retirement Contribution Limits for 2026

Fri, 14 Aug 2026 17:28:00 GMT

The Internal Revenue Service (IRS) has released new limits for certain retirement accounts for the coming year.

Keep in mind that this update is for informational purposes only, so please consult with an accounting or tax professional before making any changes to your 2026 tax strategy. You can also contact your financial professional, who may be able to provide you with information about the pending changes.

Individual Retirement Accounts (IRAs)

Traditional IRA contribution limits are up $500 in 2026 to $7,500. Catch-up contributions for those over age 50 are up $100 to $1,100, bringing the total limit to $8,600.

Remember, once you reach age 73, you must begin taking required minimum distributions from a Traditional IRA in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.

Roth IRAs

The income phase-out range for Roth IRA contributions increases to $153,000-$168,000 for single filers and heads of household, a $3,000 increase. For married couples filing jointly, the phase-out will be $242,000-$252,000, a $6,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.

To qualify for the tax-free and penalty-free withdrawal of earnings, Roth 401(k) distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death.

Workplace Retirement Accounts

Those with 401(k), 403(b), 457 plans, and similar accounts will see a $1,000 increase for 2026, the limit rising to $24,500. Those aged 50 and older will continue to have the ability to contribute an extra $8,000, bringing their total limit to $32,500. Those aged 60, 61, 62, and 63 may enjoy a higher catch-up contribution of $11,250, raising their total contribution limit to $35,750.

Once you reach age 73 you must begin taking required minimum distributions from your 401(k) or other defined-contribution plans in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.

SIMPLE Accounts

A $500 increase in limits for 2026 gives individuals contributing to this incentive match plan a $17,000 stoplight. Pursuant to the SECURE Act 2.0, certain applicable plans have an increased limit of $18,100.

Much like a traditional IRA, once you reach age 73, you must begin taking required minimum distributions from a SIMPLE account in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.

As a reminder, this article is for informational purposes only. Consult with an accounting or tax professional before making any changes to your 2025 tax strategy.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright2025 FMG Suite.

What Is a Roth Conversion—and When Does It Make Sense?

Fri, 14 Aug 2026 17:04:15 GMT

What is a Roth conversion?

A Roth conversion is a strategy that can help some investors build more tax flexibility in retirement. It isn’t right for everyone—and the “best” timing often depends on your tax bracket, cash-flow resources, and long-term goals. Here’s a clear overview of what a Roth conversion is, how it works, and when it may be worth exploring.

A Roth conversion is when you move money from a pre-tax retirement account—most commonly a Traditional IRA (or sometimes a 401(k) rolled into an IRA)—into a Roth IRA.

The key tradeoff:

You pay income taxes today on the amount you convert (because the money hasn’t been taxed yet).
In return, future qualified withdrawals from the Roth IRA can be tax-free if IRS rules are met.

A conversion is not the same thing as a Roth contribution. Roth contributions depend on income eligibility rules, while conversions are generally allowed regardless of income (though taxes still apply).

Why do people consider Roth conversions?

Retirement taxes are often more complicated than many expect. Social Security, pensions, IRA withdrawals, and required minimum distributions (RMDs) can interact in ways that increase taxable income.

A Roth conversion may help you:

Create tax diversification (having a mix of taxable, tax-deferred, and tax-free accounts)
Potentially reduce future RMDs from traditional IRAs (Roth IRAs don’t have RMDs during the original owner’s lifetime)
Increase flexibility in retirement spending (you can choose which “tax bucket” to draw from)
Support estate planning goals (heirs may receive Roth assets with different tax characteristics than pre-tax IRA assets)

It’s important to note that a conversion is a planning tool—not a guaranteed benefit. The value depends on future tax rates, investment results, and your personal circumstances.

How does the tax bill work?

When you convert, the converted amount is typically taxed as ordinary income in the year of the conversion.

Example (simplified):

You convert $50,000 from a Traditional IRA to a Roth IRA.
That $50,000 is added to your taxable income for the year.
The actual tax cost depends on your marginal bracket, deductions, credits, and state taxes.

Because a conversion increases income, it can also have ripple effects—such as affecting Medicare premium surcharges (IRMAA), taxation of Social Security benefits, or eligibility for certain deductions/credits.

When might a Roth conversion make sense?

Below are common situations where a conversion might be worth evaluating.

If leaving assets to heirs is a goal, Roth accounts can be attractive because qualified distributions are typically tax-free. Inherited account rules are complex, but for some families, Roth assets can provide planning flexibility.

When might a Roth conversion not make sense?

1) You’re in a temporarily lower tax bracket

Many people have “gap years” where income dips—for example:

Early retirement before Social Security begins
A year between jobs
A business owner experiencing a lower-income year

In those years, converting amounts up to the top of your current tax bracket can be a way to use today’s lower rate rather than potentially higher rates later.

2) You expect higher taxable income later

Reasons your tax rate might rise in the future include:

RMDs beginning at the required age
Starting Social Security and/or pension benefits
Large balances in Traditional accounts after decades of growth

A measured conversion plan over multiple years can sometimes help smooth taxes rather than forcing larger withdrawals later.

3) You can pay the taxes without using IRA funds

Many planners view conversions as more compelling when you can pay the tax bill using cash from a taxable account (or other non-retirement resources), rather than withholding from the converted amount.

Why? Because using IRA money to pay the tax reduces the amount that ends up in the Roth, which may reduce the long-term benefit.

4) You want more control over retirement taxes

Tax flexibility can be especially helpful in years when you:

Sell a business or real estate
Have large medical expenses
Need to fund a big one-time expense

Having Roth assets available may allow you to meet spending needs without pushing taxable income to an uncomfortable level.

5) You’re thinking about legacy planning

Conversions are not “automatic wins.” Here are common reasons to be cautious.

1) You’re currently in a high bracket and expect lower rates later

If you’re in peak earning years and anticipate lower income in retirement, paying higher taxes today may be less appealing.

2) The conversion pushes you into tax phaseouts or higher Medicare premiums

Even if your federal bracket doesn’t change, additional income can trigger:

Higher Medicare Part B/Part D premiums (IRMAA)
More Social Security benefits becoming taxable
Reduced deductions or credits

3) You may need the money soon

Roth conversions are intended as longer-term planning moves. If you expect to withdraw those converted funds in the near term, the math may not work in your favor.

4) You don’t have cash to pay the tax bill

If the conversion tax must be paid from the IRA, it may reduce the potential advantages. This doesn’t automatically rule it out, but it often changes the analysis.

Practical ways to approach a conversion decision

Rather than thinking in “all or nothing” terms, consider a structured approach:

Estimate your current and future tax brackets. Include RMD projections, Social Security, pension income, and investment income.
Model partial conversions. Many people convert smaller amounts over several years to manage brackets and IRMAA thresholds.
Plan the source of tax payments. Identify whether taxes will be paid from cash reserves, taxable accounts, or withholding.
Coordinate with a tax professional. A CPA can help evaluate bracket impacts, deductions, and state tax considerations.
Review annually. Tax laws, markets, and your income can change—so a conversion plan should stay flexible.

Bottom line

A Roth conversion is a trade: paying taxes now to potentially gain tax-free growth and withdrawals later. It can make sense during lower-income years, when managing future RMDs is a priority, or when tax flexibility is valuable. But it can also create unintended consequences if it pushes income into higher tax zones or triggers Medicare premium surcharges.

If you’re considering a Roth conversion, the most useful next step is usually a personalized, numbers-based analysis—coordinated with your tax professional—to see what level (if any) fits your broader retirement plan.

This article is for informational purposes only and is not tax or legal advice. Consult a qualified tax professional regarding your specific situation.

Is Your Portfolio Still Speaking Your Risk Language?

Fri, 14 Aug 2026 14:33:05 GMT

Risk tolerance isn’t a permanent personality trait

Just as every season brings change to nature, market cycles bring both challenges and opportunities. The same is true for you. Your life changes. The markets change. And sometimes—quietly, without anyone meaning to—your portfolio ends up reflecting the risk tolerance you had 10 or 20 years ago, not the one you have today.

At Coast Wealth, we see this often when new clients come to us in the Myrtle Beach area. Their investment accounts may have performed “fine” on paper, but the bigger issue is something more personal: the portfolio doesn’t match how they actually feel about risk anymore. When that happens, even a well-designed plan can start feeling like it belongs to someone else.

Many people think of risk tolerance as a one-time questionnaire you fill out when you first start investing—like choosing “aisle” or “window” and assuming that preference will never change.

In reality, risk tolerance is more like your “sea legs.” You may have felt steady on choppy water at 35. At 55 or 65, you may prefer a calmer ride—even if you’re still committed to long-term growth.

Risk tolerance can shift for perfectly reasonable reasons:

Life stage changes: Approaching retirement (or living in retirement) changes the stakes.
New responsibilities: Supporting aging parents, adult children, or grandchildren.
A major financial milestone: Selling a business, receiving an inheritance, paying off the mortgage.
A big market event: After living through 2008 or 2020, many investors have a clearer sense of what volatility feels like.
Health considerations: It’s hard to “stay the course” when stress is no longer just emotional—it’s physical.

None of these changes mean you’re doing something wrong. They simply mean it’s wise to update the plan.

The mismatch we often notice with new clients

When new clients meet with Coast Wealth, we often discover one of two gaps:

The portfolio is riskier than the client realizes. They may have grown accustomed to seeing a rising account balance over the years, but they haven’t considered what a meaningful downturn would look like now—or how they’d react.
The portfolio is more conservative than the client needs. This is less talked about, but it matters. If your investments are positioned too defensively, you may be taking a different kind of risk: not keeping pace with inflation or not supporting long-term goals.

In both cases, the issue isn’t “aggressive” versus “conservative.” The real issue is alignment—your portfolio should match your goals, your time horizon, and your ability and willingness to accept market ups and downs.

A quick story (with details changed, of course)

A couple we’ll call “Tom and Linda” moved near Myrtle Beach, South Carolina after years of busy careers. They were thoughtful savers, and their previous plan had been built during their prime earning years.

When we asked a simple question—“How do you feel about a 20% decline in a difficult year?”—the room got quiet.

Their portfolio had been designed for the growth-focused version of themselves. But their real-world reaction today was different. They weren’t trying to “time the market.” They weren’t panicking. They simply wanted a plan that allowed them to enjoy this season of life without feeling like every headline could ruin their week.

That’s what an updated risk tolerance conversation can do: it brings the plan back to real life.

Why updating risk tolerance matters—especially now

Even if you’ve been investing for decades, today’s market environment can feel different:

Interest rates move, affecting bonds and borrowing costs.
Inflation can change spending power.
Market leadership rotates—what worked last cycle may not lead this one.

When your portfolio is aligned with your current risk tolerance, you’re more likely to:

Stick with your strategy during volatility (a major advantage over time).
Avoid emotional decisions like selling after declines or chasing what just soared.
Keep your retirement income plan grounded in realistic expectations.
Sleep better, which is an underrated financial planning benefit.

“But if I reduce risk, won’t I fall behind?”

Sometimes. It depends.

There’s a real tradeoff between stability and growth, and we won’t pretend otherwise. But reducing risk doesn’t automatically mean abandoning growth—it means designing growth that you can actually live with.

On the flip side, staying too aggressive can also “set you back,” especially if a major downturn forces withdrawals at the wrong time or causes you to abandon the plan entirely.

The goal is not to build the most exciting portfolio. The goal is to build the portfolio you can repeat through many market seasons.

How Coast Wealth approaches this as part of our process

As part of our planning process at Coast Wealth, we make it a priority to ensure your risk tolerance is updated , not assumed.

That typically includes:

A conversation about what risk means to you today—not years ago.
Clarifying time horizons for different goals (retirement income, travel, legacy, major purchases).
Reviewing how your current portfolio might behave in different market environments.
Aligning investment strategy with the bigger plan—because the portfolio is a tool, not the whole toolbox.

If you’re in the Myrtle Beach community and you haven’t revisited your risk tolerance recently, consider this a friendly nudge. Not an alarm. Not a sales pitch. Just a reminder that it’s normal to evolve—and wise to let your investment strategy evolve with you.

A simple question to ask yourself

If you looked at your portfolio today and saw a temporary decline, would your first thought be:

“This is uncomfortable, but I understand the plan,”

“Why am I taking this kind of risk at this point?”

If it’s the second one, it may be time for a review.

Market cycles come and go. Your plan should be built to handle them—with perspective, patience, and a risk level that fits who you are right now.

South Carolina Retirement Tax Benefits: What You Need to Know in 2026

Fri, 14 Aug 2026 13:52:13 GMT

The Retirement Income Deduction: Up to $15,000 Per Couple

One of the first things I walk new clients through — especially those relocating from the Northeast or Midwest — is how different their tax picture looks in South Carolina. Most of them are genuinely surprised. They've spent decades in high-tax states, assuming retirement is going to cost them just as much in taxes as their working years. In South Carolina, that's often not the case at all.

This isn't a pitch. It's just math. And if you're planning to retire in South Carolina — or you're already here — understanding how the state treats retirement income is one of the most important financial planning moves you can make. So let me lay it out clearly.

Social Security Is Completely Tax-Free in South Carolina

Let's start with the biggest one. South Carolina does not tax Social Security income — period. It doesn't matter how much you receive or what your total income is. Your Social Security benefit is fully exempt from state income tax.

Compare that to states like Minnesota, Vermont, or Colorado, where a significant portion of your Social Security can be taxed at the state level on top of whatever federal taxes apply. For retirees who receive $2,000, $3,000, or more per month in Social Security, this exemption alone can save thousands of dollars a year.

And keep in mind — even at the federal level, up to 85% of your Social Security can be taxable depending on your combined income. South Carolina completely removes the state layer from that equation.

This is the one that surprises people most. If you're 65 or older, South Carolina allows you to deduct up to $10,000 of retirement income from your state taxable income. For couples filing jointly, that deduction goes up to $15,000.

What counts as retirement income for this deduction? Distributions from 401(k)s, traditional IRAs, pensions, and other qualified retirement plans all qualify. So if you're pulling $40,000 a year from your IRA, you can immediately deduct $10,000 (or $15,000 if married) before South Carolina even starts calculating what you owe.

When you stack this deduction on top of the Social Security exemption, many of my retired clients here in Myrtle Beach end up with a state income tax bill that's very low — sometimes zero. That's not an accident. South Carolina has deliberately made itself attractive to retirees, and it shows.

Property Taxes: The Homestead Exemption for Seniors

South Carolina's income tax treatment of retirees is excellent, but the property tax benefit is worth knowing about too. The state offers a Homestead Exemption for residents who are 65 or older, legally blind, or totally disabled. This exemption removes the first $50,000 of your home's fair market value from property tax assessment.

To qualify, the home must be your primary residence and you must have lived in South Carolina for at least one full calendar year. You apply through your county auditor's office — it's a one-time application and it renews automatically after that.

Combined with the fact that South Carolina's overall property tax rates are already among the lowest in the country, this exemption makes a meaningful difference on your annual housing costs — especially if you're on a fixed income.

No Estate or Inheritance Tax

South Carolina has no estate tax and no inheritance tax. Whatever you've built — your investment accounts, your home, your life insurance — passes to your heirs without South Carolina taking a cut. This matters a lot for clients who are thinking about legacy planning alongside their own retirement income needs.

Federal estate taxes can still apply if your estate is large enough (the federal exemption in 2026 is substantial, so most families aren't affected), but removing the state layer entirely simplifies the picture considerably.

What South Carolina Does Tax

In the interest of giving you the full picture: South Carolina does have a state income tax, with a top rate of 6.4% in 2026. Income that doesn't fall under the exemptions above — such as part-time work income, rental income, or investment gains above certain thresholds — is still subject to state tax.

Sales tax is also a factor. South Carolina's base sales tax rate is 6%, and counties can add local taxes on top of that. Grocery food is taxed at a reduced rate. It's not a zero-tax state — but for retirement income specifically, the picture is genuinely favorable compared to most of the country.

How This Plays Into Your Retirement Income Strategy

Understanding the tax environment is one thing. Using it strategically is another. As a fiduciary financial advisor in Myrtle Beach, part of my job is building retirement income plans that are tax-efficient — not just today, but over the next 20 to 30 years.

For example, knowing that South Carolina doesn't tax Social Security can influence when you claim benefits. Knowing about the retirement income deduction can affect how you sequence withdrawals from different accounts — when you pull from your IRA vs. a Roth vs. a taxable account. These decisions compound over time, and getting them right in the early years of retirement can mean tens of thousands of dollars staying in your pocket rather than going to the state.

The tax benefits in South Carolina are real and meaningful — but they work best when you have a coordinated plan around them.

That's where having a local advisor who understands both the state's rules and your specific situation makes a difference.

Is Myrtle Beach a Good Place to Retire? A Financial Advisor’s Honest Take

Fri, 14 Aug 2026 13:01:21 GMT

South Carolina’s Retirement Tax Benefits Are the Real Deal

Let’s start with taxes, because this is usually what surprises people most. South Carolina is one of the most retirement-friendly states in the country from a tax standpoint.

First, Social Security income is completely exempt from South Carolina state income tax. That’s a big deal if Social Security makes up a meaningful portion of your retirement income — and for most of my clients, it does.

Second, if you’re 65 or older, South Carolina allows a retirement income deduction of up to $10,000 for individuals (or $15,000 for couples filing jointly). That covers income from pensions, 401(k) distributions, and IRA withdrawals. When you combine this with the Social Security exemption, many of my retired clients in Myrtle Beach pay very little — sometimes nothing — in state income taxes.

There’s also no estate or inheritance tax in South Carolina, which matters if you’re thinking about what you pass on to your kids or grandkids.

People ask me this question all the time — and I mean all the time. I’m a fiduciary financial advisor based right here in Myrtle Beach, SC, and I’ve spent the last two decades helping pre-retirees and retirees figure out where their money needs to go and whether the lifestyle they’re picturing actually lines up with the math. So when someone says, “I’m thinking about retiring in Myrtle Beach — is it a good idea?” I have a lot to say.

Short answer: yes, for the right person, Myrtle Beach is a genuinely excellent place to retire. But “the right person” is key. Let me break down what I tell my own clients.

The Cost of Living Is Lower Than You Might Expect

Myrtle Beach has a reputation as a tourist town, and yes, the beach is gorgeous. But here’s something that often shocks people relocating from the Northeast or Midwest: the day-to-day cost of living is quite reasonable.

Housing is the biggest factor. You can find a comfortable 3-bedroom home in a nice neighborhood for well under $400,000. Waterfront and golf course communities exist at all price points. Property taxes are also low — South Carolina has a homestead exemption that reduces the taxable value of your primary residence if you’re 65 or older, which cuts your property tax bill significantly.

Groceries, dining, and everyday expenses run below the national average. And while healthcare costs are a real consideration anywhere you retire, the Grand Strand area has continued to grow its medical infrastructure — including a major regional hospital system — so access isn’t the concern it once was.

The Lifestyle Is What Keeps People Here

I moved to Myrtle Beach because of the lifestyle, and I’ve never looked back. For retirees, this area offers something that’s genuinely hard to find elsewhere: a combination of natural beauty, affordable living, and a pace of life that actually lets you enjoy your retirement.

We have over 100 golf courses within a short drive — no exaggeration, this is one of the top golf destinations in the world. Miles of walkable beach. Incredible seafood. A thriving arts and dining scene that people don’t expect until they get here. Winter temperatures are mild enough to stay active year-round. And because this is a major destination, there’s always something going on — festivals, live music, markets, outdoor events.

The retiree community here is also large and established. If you’re coming from out of state, you’ll find it easy to connect with people who made the same move. Active adult communities are plentiful and well-run.

What to Watch Out For

Summers are hot and humid. If you hate heat, July and August in Myrtle Beach will test your patience. Traffic can get heavy during peak tourist season — typically May through August. And while hurricane risk is a real factor, the area has strong building codes and good emergency preparedness infrastructure. Homeowners insurance can be higher here than inland, so factor that into your budget.

Also — and this is a financial planning point — don’t let the lower cost of living make you complacent. Retirement still requires a plan. Healthcare costs rise as you age. Long-term care is something most people don’t adequately prepare for. Social Security alone won’t cut it for most people. The tax advantages here are real, but they work best when you have a coordinated retirement income strategy in place.

Getting the Financial Side Right Before You Make the Move

Whether you’re already in Myrtle Beach or planning a move here, the financial planning steps are the same. Before you retire, you need to know:

How much guaranteed income you’ll have each month
How you’ll cover the gap between that and your actual expenses
How your portfolio is structured to handle market downturns without forcing you to sell at the wrong time
What your Medicare strategy looks like
When to claim Social Security to maximize your lifetime benefit

These aren’t things you figure out as you go. The decisions you make in the 5 years before and after retirement have an outsized impact on how long your money lasts. As a fiduciary financial advisor in Myrtle Beach, this is exactly the work I do with clients every day.

Bottom Line: Myrtle Beach Is a Strong Retirement Choice — With the Right Plan

If you’re looking for a place that combines low taxes, a reasonable cost of living, warm weather, and a lifestyle that actually rewards you for the decades you’ve spent working — Myrtle Beach belongs on your short list. It’s not perfect (nowhere is), but for the right person with the right financial plan, it’s an incredibly rewarding place to retire.

I’ve helped people from all over the country make this transition. Some were already local and just needed to get their finances organized. Others were relocating from New York, Ohio, New Jersey, or Michigan and needed help with everything from rolling over a 401(k) to building a retirement income strategy from scratch.

Whatever your situation, the first step is understanding where you actually stand. That starts with a conversation. If you're in need of a Real Estate agent, you can check out Carolina Living Team who specializes in out of state relocations.

Will Your IPO Take You to Mars?

Fri, 14 Aug 2026 12:04:48 GMT

This is a subtitle for your new post

When investors hear the words "initial public offering,” it’s easy to imagine they are buying a piece of a dream.

Consider the most celebrated IPO in recent history, which started trading in early June. Some assumed that when this aerospace company went public, they would feel like they were participating in a mission to Mars.

But IPOs don't work that way.

When a company goes public, the proceeds rarely go toward the bold mission that made the company famous. More often, the money satisfies early investors, pays down debt, or funds day-to-day operations. The romantic story and the financial mechanics can be two very different things.

Getting part of the action before trading begins is almost exclusively reserved for large institutional investors. Buying once the stock starts trading is open to anyone. But the stock price can swing dramatically, especially in the first few days of trading as the market finds its footing.

So IPOs can be more complex than the headlines suggest, which is important to understand because two high-profile AI companies are expected to go public in the months ahead.

One of the AI companies reached 100 million users faster than any application in history, and the other is backed by two of the largest technology companies in the world. Both are expected to have their IPO sometime in the autumn, so prepare to see some loud headlines.

So far in 2026, IPOs have raised the most money since 2021. Be ready for a record year if the two AI companies go public as expected.

More than likely, if you have a diversified portfolio, one or more of your investments may end up owning shares in these companies. In fact, certain investments are required to purchase newly listed companies because their investment objective is to mirror the stock market or a particular index. So you may end up being an owner.

Please reach out if you have any questions about the IPO market. It will be fun to hear your perspective on space, AI trends, and whether you’ve booked your ticket to Mars.

SEC.gov, 2026

RenaissanceCapital.com, 2026. “2026 IPO Market Stats”

The S&P 500 Composite Index is an unmanaged index that is considered representative of the overall U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

Any companies mentioned are for illustrative purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, timeframe, and risk tolerance.

This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm.

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Understanding Medicare IRMAA: What It Is, Who Pays It, and How to Plan Ahead

Fri, 14 Aug 2026 11:35:04 GMT

Quick Answer: What is IRMAA?

If you’re enrolled in Medicare (or enrolling soon), you may hear the term IRMAA and wonder what it means for your budget. IRMAA can be confusing because it’s tied to taxes, shows up after you’ve already made income decisions, and can change from year to year.

Below is a clear, planning-focused guide—especially helpful for retirees and near-retirees along the Grand Strand, including the Myrtle Beach area, and also useful no matter where you live.

IRMAA stands for Income-Related Monthly Adjustment Amount. It’s an additional premium that some higher-income Medicare beneficiaries pay on top of their standard Medicare costs.

IRMAA can apply to:

Medicare Part B (doctor visits, outpatient care)
Medicare Part D (prescription drug coverage)

You don’t “sign up” for IRMAA. If Medicare determines you’re subject to it, you’ll be notified and the extra amount is typically deducted from Social Security (or billed directly if you’re not collecting Social Security yet).

Who pays IRMAA?

You may pay IRMAA if your Modified Adjusted Gross Income (MAGI) is above certain thresholds.

Medicare generally looks at your tax return from two years prior to determine IRMAA. For example, your Medicare premiums for this year are usually based on income from two years ago.

What counts toward MAGI for IRMAA?

MAGI for IRMAA is generally your Adjusted Gross Income (AGI) plus tax-exempt interest (commonly from municipal bonds). AGI itself can include items like:

Wages (if you’re still working)
Pension income
IRA distributions
Social Security (partially taxable depending on your overall income)
Capital gains
Interest and dividends
Roth conversions (important planning item)

How IRMAA is determined (and why it can surprise people)

IRMAA is based on income brackets —crossing a threshold by even a small amount can increase premiums for the year.

Common situations that can trigger IRMAA unexpectedly include:

Selling a home or second property with a capital gain
Large IRA withdrawals in a single year
Roth conversions (which increase taxable income)
Required Minimum Distributions (RMDs) beginning later in retirement
High investment income in a strong market year

Because the calculation uses a two-year lookback, the premium impact often arrives after the income event has passed—when it’s harder to “undo” the decision.

How much does IRMAA cost?

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IRMAA adds a surcharge to your Part B premium and also affects Part D with an additional monthly amount.

The exact dollar amounts and income brackets can change each year. What matters for planning is the concept: as income rises, Medicare premiums may rise, too, and those increases can be meaningful over 12 months—especially for couples.

If you want a precise estimate for your situation, it’s usually best to review:

Your most recent tax return
Upcoming income events (property sales, large withdrawals, conversions)
A multi-year retirement income plan

Can you appeal IRMAA?

Yes— in certain situations.

If your income is now lower due to a “life-changing event,” you may be able to request that Social Security use a more current year’s income data. Examples can include:

Retirement or reduced work hours
Marriage, divorce, or death of a spouse
Loss of income-producing property
Employer settlement changes

This is not automatic; it typically requires documentation and a formal request. Results vary, and it’s important to respond promptly if you believe you qualify.

Practical planning strategies to help manage IRMAA

No strategy eliminates IRMAA in every case, and it’s not always advisable to avoid it at all costs. But there are several planning moves that may help reduce surprises and keep income more predictable.

1) Coordinate withdrawals across account types

Many retirees have a mix of:

Tax-deferred accounts (traditional IRA/401(k))
Taxable brokerage accounts
Tax-free accounts (Roth IRA)

A thoughtful withdrawal approach may help manage taxable income year to year—particularly before RMDs begin.

2) Plan Roth conversions carefully

Roth conversions can be a powerful long-term planning tool, but they increase taxable income in the year of conversion—potentially triggering IRMAA.

Instead of converting a large amount at once, some retirees consider spreading conversions over multiple years. The trade-off: smaller annual conversions may reduce the chance of jumping brackets, but also may take longer to execute the strategy. The “best” approach depends on tax rates, future RMD projections, and cash-flow needs.

3) Watch one-time income events

If you’re considering a significant transaction—like selling an appreciated property—ask in advance how it could affect:

Your tax bill
Your Medicare premiums (IRMAA)
Net proceeds and long-term cash flow

For many retirees in coastal markets (including areas around Myrtle Beach), property decisions can have outsized tax consequences due to appreciation.

4) Review tax-exempt interest (it still counts for IRMAA)

Tax-exempt municipal bond interest may be excluded from federal income tax, but it can still be included in MAGI for IRMAA calculations. This doesn’t mean munis are “bad”—it just means they should be evaluated in the context of your overall income picture.

5) Use multi-year planning (not just a single tax year)

IRMAA planning works best when you zoom out. A multi-year view can help you align:

Retirement date and income drop
Social Security claiming strategy
RMD timing
Major purchases or charitable goals

Key takeaway

IRMAA is Medicare’s way of adjusting premiums based on income. The most important thing to know is that big income years can lead to higher Medicare premiums two years later, so proactive planning can reduce surprises.

If you’re approaching Medicare enrollment or already receiving benefits, it may be worth reviewing your tax return and upcoming income decisions to understand whether IRMAA could apply—and what options you have.

This article is for educational purposes only and is not tax or legal advice. Medicare rules and income thresholds can change. Consider working with qualified professionals regarding your specific situation.

Can You Work While Collecting Social Security? 2026 Rules

Fri, 14 Aug 2026 09:28:01 GMT

Can You Work While Collecting Social Security? What to Know in 2026

Yes, you can work while collecting Social Security retirement benefits. However, if you have not reached your full retirement age and earn more than the Social Security Administration’s annual limit, some of your benefits may be temporarily withheld. Once you reach full retirement age, you can earn any amount without your work income reducing your Social Security benefit.

The rules sound simple, but the interaction between earnings, taxes, Medicare premiums, and the age at which you claim benefits can make the decision more complicated. Understanding those factors can help you avoid surprises and make a more informed retirement-income decision.

What is the Social Security earnings limit for 2026?

The amount you can earn without having Social Security benefits withheld depends on whether you have reached your full retirement age.

For 2026:

If you are under full retirement age for the entire year, you can earn up to $24,480 before benefits are withheld.
If you reach full retirement age during 2026, you can earn up to $65,160 during the months before reaching full retirement age.
Beginning with the month you reach full retirement age, there is no earnings limit.

These limits generally increase periodically. The Social Security Administration publishes updated figures each year. Social Security Administration: Receiving Benefits While Working

What happens if you earn more than the Social Security limit?

If you are under full retirement age for all of 2026, Social Security generally withholds $1 in benefits for every $2 you earn above $24,480.

During the year in which you reach full retirement age, Social Security generally withholds $1 for every $3 you earn above $65,160. Only earnings received before the month you reach full retirement age count toward this higher limit.

Starting with the month you reach full retirement age, your earnings no longer reduce your Social Security retirement benefits.

Example: Working before full retirement age

Suppose you are 64 throughout 2026 and receive $2,000 per month in Social Security retirement benefits. Your annual benefit would be $24,000.

You also earn $40,000 from a job.

Your earnings exceed the 2026 limit by:

$40,000 − $24,480 = $15,520

Social Security would withhold approximately:

$15,520 ÷ 2 = $7,760

That does not necessarily mean each monthly payment would simply be reduced by an equal amount. Social Security may withhold entire monthly benefit payments until the required amount has been withheld.

Example: Reaching full retirement age in 2026

Suppose you reach full retirement age in October 2026 and earn $72,000 from January through September.

Your earnings before the month you reach full retirement age exceed the applicable limit by:

$72,000 − $65,160 = $6,840

Social Security would withhold approximately:

$6,840 ÷ 3 = $2,280

Beginning in October, you can earn any amount without the retirement earnings test reducing your benefit.

Are benefits withheld because of work permanently lost?

No. Social Security benefits withheld under the retirement earnings test are not necessarily lost forever.

When you reach full retirement age, the Social Security Administration recalculates your monthly benefit to account for the months in which benefits were withheld. This adjustment can result in a higher monthly payment going forward. Social Security Administration: Retirement Earnings Test

However, this does not make the timing decision irrelevant. Having payments withheld today can affect your short-term cash flow, taxes, investment withdrawals, and overall retirement plan. It is important to distinguish between a permanent early-filing reduction and benefits temporarily withheld because of excess work earnings.

What counts as earnings for the Social Security earnings test?

Social Security generally counts:

Wages from employment
Bonuses and commissions earned through employment
Net earnings from self-employment

Social Security generally does not count:

Pension income

IRA or 401(k) withdrawals
Investment interest
Dividends
Capital gains
Annuity payments
Veterans benefits
Other government or military retirement benefits

This distinction is important. You may have substantial retirement income and still have little or no “earned income” for purposes of the Social Security earnings test.

However, retirement-account withdrawals and investment income can still affect the federal taxation of your Social Security benefits and potentially your Medicare premiums.

What is full retirement age?

Your full retirement age, sometimes called FRA, is the age at which you become eligible for your unreduced Social Security retirement benefit.

Your full retirement age depends on your birth year:

Birth year Full retirement age

1955 66 and 2 months

1956 66 and 4 months

1957 66 and 6 months

1958 66 and 8 months

1959 66 and 10 months

1960 or later 67

For example, someone born in 1959 reaches full retirement age at 66 and 10 months. Someone born in 1960 or later reaches it at age 67. Social Security Administration: Full Retirement Age

Full retirement age is not necessarily the same as the age at which you retire from work. You can stop working before FRA, at FRA, or after FRA. You can also begin Social Security while still working.

Can you work full time and collect Social Security?

Yes. You can work full time and collect Social Security retirement benefits.

If you have reached full retirement age, there is no limit on how much you can earn from employment while receiving your full benefit.

If you are younger than full retirement age, full-time earnings may cause some or all of your benefits to be withheld. Whether that happens depends on your annual earnings, your monthly Social Security benefit, and when you reach full retirement age.

A person with higher earnings may have all Social Security payments withheld for part or all of the year. That does not mean the person is no longer eligible for Social Security. It means the retirement earnings test is being applied.

Can working increase your future Social Security benefit?

It can.

Social Security generally calculates your retirement benefit using your highest 35 years of covered earnings. If your current earnings are higher than one of the years previously used in your calculation, Social Security may replace the lower year with the new, higher-earning year.

That could increase your future benefit.

Continuing to work can be especially helpful if you have fewer than 35 years of covered earnings. In that situation, Social Security may use zero-earnings years in the calculation. Adding another year of earnings could replace one of those zero years.

Social Security normally reviews earnings records and adjusts benefits when additional earnings result in a higher payment.

Will working make your Social Security taxable?

Working can cause more of your Social Security benefits to become subject to federal income tax.

The IRS uses a calculation sometimes called “combined income.” It generally includes:

Adjusted gross income
Tax-exempt interest
One-half of your Social Security benefits

For an individual filer:

Combined income between $25,000 and $34,000 may cause up to 50% of benefits to be taxable.
Combined income above $34,000 may cause up to 85% of benefits to be taxable.

For a married couple filing jointly:

Combined income between $32,000 and $44,000 may cause up to 50% of benefits to be taxable.
Combined income above $44,000 may cause up to 85% of benefits to be taxable.

This does not mean that you pay an 85% tax rate on Social Security. It means up to 85% of your Social Security benefit may be included in your federally taxable income. The actual tax depends on your federal income-tax bracket and the rest of your return. IRS: Social Security Benefits May Be Taxable

Does South Carolina tax Social Security benefits?

South Carolina does not tax Social Security retirement benefits.

Even if part of your benefit is taxable on your federal return, that amount is generally exempt from South Carolina individual income tax. South Carolina Department of Revenue: Individual Income Tax FAQs

However, wages, retirement-account distributions, pension income, and investment income may receive different tax treatment. South Carolina also provides certain retirement-income deductions, subject to its rules and eligibility requirements.

Retirees in Myrtle Beach and throughout the Grand Strand should consider both federal and South Carolina tax consequences when coordinating employment income with Social Security and retirement-account withdrawals

Can working affect your Medicare premiums?

Working does not directly reduce your Social Security benefit after full retirement age, but higher income can affect what you pay for Medicare.

Medicare Part B and Part D premiums can include an Income-Related Monthly Adjustment Amount, commonly known as IRMAA. This additional charge is generally based on modified adjusted gross income from two years earlier.

For example, higher income in one year could increase Medicare premiums two years later. Wages, Roth conversions, capital gains, retirement-account distributions, and other income can all contribute to this calculation.

This is one reason the decision to keep working should be evaluated as part of a broader retirement-income and tax plan—not solely by looking at the Social Security earnings limit.

Is it better to claim Social Security while working or wait?

There is no single answer for everyone.

Claiming while working may make sense if:

You need additional income now.
Your earnings are below the applicable limit.
You have health concerns that affect life expectancy.
You want to reduce withdrawals from investments.
Your spouse or other dependents may become eligible for benefits based on your record.

Waiting may deserve consideration if:

Your work income already covers your living expenses.
The earnings test would cause most or all of your benefits to be withheld.
You want to increase your future monthly benefit.
You expect a longer retirement.
A larger benefit could improve the financial security of a surviving spouse.
You want to manage the federal taxation of Social Security more carefully.

For people born in 1960 or later, claiming at age 62 can permanently reduce the scheduled retirement benefit compared with claiming at the full retirement age of 67. On the other hand, delaying beyond full retirement age can earn delayed retirement credits until age 70. There is generally no additional benefit from delaying past age 70.

The appropriate decision should consider cash flow, health, longevity, taxes, spousal benefits, survivor benefits, employment income, and existing retirement assets.

What if you retire in the middle of the year?

A special monthly earnings rule may help during the first year you retire.

This rule can allow you to receive Social Security for months in which the Social Security Administration considers you retired, even if your total earnings earlier in the calendar year exceeded the annual limit.

In 2026, a person under full retirement age for the entire year may generally be considered retired in a month when earnings are $2,040 or less, assuming the person does not perform substantial services in self-employment.

For someone reaching full retirement age during 2026, the applicable monthly amount before FRA is generally $5,430. Social Security Administration: Special Earnings Limit Rule

This rule can be particularly important for someone who earns a substantial salary early in the year, retires in the summer or fall, and then begins receiving Social Security.

Frequently asked questions

Can I collect Social Security at 62 and still work?

Yes. If you are receiving benefits before full retirement age and your expected earnings change, notify Social Security promptly. An inaccurate estimate may result in too many benefits being withheld or an overpayment that must later be repaid.

The bottom line

Yes. However, if you are under full retirement age, your benefits may be withheld when your earnings exceed the annual limit. Claiming at 62 also normally results in a permanently lower monthly benefit than waiting until full retirement age.

How much can I earn in 2026 while collecting Social Security?

If you are under full retirement age for the entire year, the 2026 limit is $24,480. In the year you reach full retirement age, the limit is $65,160 for earnings received before the month you reach FRA. After reaching FRA, there is no earnings limit.

Does Social Security count IRA withdrawals as earnings?

No. IRA and 401(k) withdrawals generally do not count as earned income under the Social Security retirement earnings test. They can, however, affect federal taxes and Medicare premiums.

Does an annuity count toward the Social Security earnings limit?

Annuity income generally does not count toward the retirement earnings limit because it is not income from work. It may still affect your taxable income and other areas of your retirement plan.

Are Social Security benefits taxed in South Carolina?

No. South Carolina does not tax Social Security benefits, even when a portion is included in federally taxable income.

Do I need to stop working before applying for Social Security?

No. You do not have to stop working before applying. The effect of continued employment depends on your age and earnings.

Should I notify Social Security if my expected earnings change?

You can work and receive Social Security at the same time. The key question is how your age and earnings affect your payments.

Before full retirement age, earning more than the applicable annual limit may cause benefits to be temporarily withheld. During the year you reach full retirement age, a higher limit applies. Starting with the month you reach FRA, you can earn any amount without work income reducing your Social Security retirement benefit.

The decision involves more than the earnings test. Working may affect federal taxes, Medicare premiums, investment withdrawals, spousal planning, and the long-term amount of your Social Security benefit.

A coordinated retirement-income plan can help you decide when to claim Social Security, how long to work, and which accounts to use for income along the way.

This article is for general educational purposes only and should not be considered individualized investment, tax, or legal advice. Social Security and tax rules may change. Consult the Social Security Administration and qualified financial and tax professionals regarding your circumstances.

Do You Have to File Jointly if Married? a Complete Guide

Thu, 13 Aug 2026 18:19:05 GMT

Do You Have to File Jointly if Married? A Complete Guide

No, you do not have to file jointly just because you're married. Married couples generally choose between Married Filing Jointly and Married Filing Separately , and the right choice depends on income mix, liability exposure, and long-term planning, not habit.

The Filing Status Choice Most Couples Overlook

Most married couples file jointly on autopilot, but that's a mistake. Joint filing is a choice, not a requirement, and the IRS treats married filers differently from single filers in ways that can change both tax liability and legal exposure. The popular advice says to “just file jointly,” but that advice is too shallow for couples who care about retirement income, prior tax issues, or asset protection.

The reason this matters is simple. A joint return folds both spouses' income, deductions, and credits into one filing, and that can change the tax result materially because the return is based on combined taxable income rather than two separate returns ( IRS Publication 501 ). It also means both spouses must agree to file one return and usually both sign it, so MFJ is a mutual decision, not a unilateral one ( IRS Publication 501 ).

Practical rule: If you wouldn't be comfortable signing for both of you, you should slow down and examine separate filing.

That's the part most consumer content skips. Joint filing can absolutely lower taxes, but it also creates joint liability, and that's the trade-off that should drive the decision for many older couples. If one spouse has business deductions, tax disputes, or a messy filing history, the question isn't only “Will we save money?” It's “Are we willing to share the risk?”

You also don't need to live together to file jointly, as long as you're married on the last day of the tax year and not legally separated under state law ( IRS filing status guidance ). So the decision isn't about household logistics. It's about whether you want one joint tax position or two separate ones.

For couples approaching retirement, this deserves real attention every year. Income patterns change, deductions change, and the cost of a bad filing decision can be much larger than a smaller refund.

How the IRS Defines Your Filing Status Options

The IRS gives married couples two main choices, Married Filing Jointly and Married Filing Separately. Joint filing is allowed if you were married on the last day of the tax year and both spouses agree to file one return. If you are legally separated under state law on December 31, you can file as single. Otherwise, you use a married filing status rather than single. The IRS explains these filing status rules in its filing status guidance and Publication 501 ( IRS Publication 501 , IRS filing status guidance ).

What joint filing actually does

A joint return puts both spouses' income, deductions, and credits on one Form 1040. The tax is then calculated on the couple's combined taxable income, not on two separate tax profiles. That matters because one spouse's higher income can push the other spouse into a different bracket, while one spouse's deductions can offset income for both of you.

What separate filing actually does

Separate filing keeps each spouse's return separate. Each spouse reports individual income and claims only the items allowed on a separate return. That can be the cleaner option when one spouse wants to keep tax items isolated, or when one spouse cannot or will not consent to a joint filing. Both spouses must sign a joint return, and both are responsible for the full tax due, including interest and penalties.

The filing choice also changes the threshold for who must file. For 2025 , married couples filing jointly generally do not need to file until gross income reaches $31,500 if both spouses are under 65, or $33,100 if one spouse is 65 or older ( IRS tax tutorial ). The 2025 MFJ 10% bracket extends to $23,850, and the 12% bracket extends to $96,950 ( IRS tax tutorial ). That is why filing status is not just a refund question. It affects how much of your income is taxed at each rate, and it changes the risk each spouse takes on by signing the return.

Understanding the Marriage Penalty and Marriage Bonus

The tax code does not treat every married couple the same. For some couples, marriage creates a penalty . For others, it creates a bonus . The driver is how income is split between spouses, because a joint return combines income and deductions on one tax return.

Why income mix changes the result

When both spouses earn similar incomes, combining them can push more income into higher brackets. That is where the penalty risk shows up. When one spouse earns most of the household income and the other earns little or nothing, the combined return often softens the rate impact and creates a bonus. The same filing status can help one couple and hurt another because the bracket pressure is different.

Treasury analysis has shown that a large share of non-elderly married tax filers were expected to face a marriage penalty, while another large share were expected to receive a marriage bonus. The exact outcome depended on how the household income was structured. The point is simple, the tax code can reward or punish marriage based on who earns what inside the household.

Bottom line: If your incomes are uneven, joint filing often helps. If your incomes are similar, check whether the combined return pushes you into a worse tax position.

Congress's CRS also noted that joint-filing behavior has shifted over time. The share of nondependent taxpaying adults filing as part of a married joint return fell from 57.7% in an earlier benchmark year to 50.7% in 2022 ( CRS PDF ). Joint filing still dominates, but that does not mean it is the right choice for every household.

Income Scenario Spouse A Income Spouse B Income Likely Outcome Estimated Annual Impact

Similar earners Moderate Moderate More likely marriage penalty Could raise tax liability

One-earner household Higher Low or none More likely marriage bonus Could reduce tax liability

Uneven retirement income Higher Lower Often a mixed result Depends on bracket placement and deductions

The Liability Risk That Changes Everything

The biggest mistake couples make is treating joint filing as a harmless default. It isn't. A joint return creates joint and individual liability, which means both spouses are responsible for the full tax owed, including interest and penalties, even if only one spouse earned the income or claimed the deduction that caused the problem ( IRS filing status guidance ).

That shared exposure matters far more than many realize. If one spouse has a business with aggressive deductions, a history of filing issues, unpaid taxes, or a return that's likely to attract scrutiny, the innocent spouse is still tied to the joint filing position. Filing jointly can save taxes, but it also binds both partners to the same tax story.

Questions that should change your decision

Ask these before you sign anything:

Does either spouse have prior IRS problems? If yes, joint filing can spread the pain.
Are any deductions aggressive or hard to defend? If yes, separate filing may reduce shared exposure.
Does one spouse control a business, side gig, or complex investment account? If yes, the other spouse needs to know exactly what's being signed.
Would either spouse be unable to cover a surprise balance due? If yes, shared liability becomes a cash-flow risk, not just a legal one.

The IRS does offer relief rules in limited situations, but relying on relief after the fact is a weak plan. You should decide up front whether the tax benefit is worth the exposure. If the answer is no, separate filing is the cleaner choice.

A couple approaching retirement should think about this the same way they think about portfolio risk. You don't ignore the downside just because the upside looks attractive. That's especially true when a joint return can attach one spouse to the other spouse's tax behavior.

Real Scenarios Where Filing Separately Makes Sense

Some couples should seriously consider separate filing, even if joint filing would usually save money. The right answer depends on the facts, but certain patterns show up again and again.

When separate filing is the smarter move

If one spouse has substantial medical expenses, separate filing can sometimes help the household work around deduction rules that depend on adjusted gross income. If one spouse has student loans on an income-driven repayment plan, separate filing can keep the repayment calculation from being distorted by the other spouse's income. If one spouse runs a business and the return has audit-sensitive deductions, separate filing can keep the other spouse away from that risk.

Rule of thumb: Separate filing is often a risk-control move first and a tax move second.

The right answer can also be practical rather than dramatic. If one spouse's tax position is simple and the other spouse's is messy, separation can preserve clarity. It can also be the right call when one spouse refuses to consent to a joint return. Joint filing requires both signatures, so nobody should be forced into shared liability for convenience.

Here's the part that matters for planning. Separate filing is not automatically worse. It can protect a refund, isolate a liability problem, or preserve the cleanest path for a spouse with a simple return. That said, it often reduces access to credits and can shrink tax benefits, so you need to compare the savings against the cost of the lost flexibility.

For couples who are close to retirement, separate filing also deserves a second look when the household is going through a transition. A year with unusual income, a new pension election, or a recent business sale can make the “usual” answer the wrong one. The filing status should match the year's risk profile, not last year's habit.

How Filing Status Connects to Retirement and Wealth Planning

For pre-retirees and retirees, filing status reaches beyond the tax return. It affects Social Security taxation, Roth conversion strategy, traditional IRA deduction rules, and the timing of income recognition. Those choices play out across multiple years, so the filing decision should match the broader retirement plan, not just a single filing season.

A married couple approaching retirement should model both filing paths across several years, especially if one spouse is still working and the other is not. Joint filing can shift bracket placement and change how taxable income is recognized during the transition into retirement. That is the part many households miss. The choice is not only about this year's refund. It is about where income lands over time and how much control you keep over that result.

The retirement question also connects to estate and family planning. When one spouse dies, the surviving spouse may face a very different tax picture, and filing choices should be reviewed alongside beneficiary updates, account titling, and income distribution planning. For couples who want to connect tax decisions with long-term transition planning, tax and estate strategies for married couples is a useful reminder that filing status is one part of a larger plan. Coast Wealth Management works on those broader transitions as part of retirement and estate coordination.

The best planning posture is direct. Treat filing status as one lever in a larger retirement-income system. Ignore it, and the rest of the plan can become less efficient than it should be.

Your Filing Status Decision Checklist

Use this checklist before you file:

Check consent first. If both spouses don't agree to a joint return, stop there. Joint filing requires both signatures.
Review liability exposure. If either spouse has tax disputes, risky deductions, or prior IRS issues, separate filing deserves a hard look.
Compare the income split. Uneven earnings often favor joint filing, while similar earnings can create a worse result.
Look at credits and deductions. Some benefits can disappear or shrink when you file separately.
Think about retirement timing. If you're coordinating retirement income, pensions, or withdrawals, the filing choice can change the tax picture across more than one year.
Decide before the deadline. You can't treat filing status like a casual afterthought and expect the same result later.

If your household has complexity, don't guess. The filing status choice should be deliberate, documented, and reviewed every year.

The most common myth is that separate filing always means higher taxes. That's false. It often costs more, but not always, and the liability protection can easily outweigh the tax difference. Another myth is that once you file one way, you're locked into that pattern forever. You're not.

If you're retired, nearing retirement, or managing a major transition, this is the kind of decision that deserves professional review. A fiduciary planner can look at your tax structure, income plan, and long-term risk together instead of treating the return as a one-year event.

If you want help deciding whether joint or separate filing fits your retirement plan, Coast Wealth Management can review the tax, income, and liability side of the decision with you. Visit Coast Wealth Management to start a conversation about a filing strategy that fits your broader financial life.

Allocation of Investments by Age: A 2026 Guide

Thu, 13 Aug 2026 14:56:34 GMT

Allocation of Investments by Age: A 2026 Guide

You're probably staring at two account statements and asking the same uncomfortable question a lot of near-retirees ask: am I too aggressive, or too conservative? One spouse wants to keep growing the nest egg. The other wants less market drama before retirement starts. Both are right to worry, because the answer changes as the years to use the money get shorter.

That's why allocation of investments by age became the default conversation starter. Age is a shortcut for time horizon, recovery time, and how much damage a bad market year can do before withdrawals begin. But age alone is not the answer. It's the first input, then you adjust for income sources, account type, spending needs, and how much drawdown risk your household can tolerate

Why Age Has Always Been the Starting Point for Allocation

A couple in their late fifties sits at the kitchen table with two 401(k) statements, a legal pad, and no patience for vague advice. One statement is heavy on stocks. The other is more cautious. They want a straight answer because retirement is close, and neither of them wants to be the one who took too much risk.

That is why age became the anchor. Younger investors usually have more time to recover from volatility, while older investors have less room for error. Real retirement-plan behavior reflects that pattern. Vanguard's 2025 report on 2024 plan-year data found participant-weighted equity allocations of 87% for workers under 25, 88% for ages 25 to 39, then 84% at 40 to 44, 73% at 50 to 54, 60% at 60 to 64, 52% at 65 to 69, and 45% for ages 70 and older ( Vanguard age-based allocation data ). Equity exposure falls as retirement gets closer, and the hardest de-risking starts after mid-career.

Age sets the starting line, but the finish line depends on the household

Older households do not automatically need to flee stocks. The portfolio's job changes. In your thirties, it is mainly trying to compound. In your sixties, it has to support spending without breaking the plan. That shift matters even more when the account is expected to fund retirement income instead of just grow on paper.

Practical rule: use age to draft the first allocation, then ask what the money has to do in real life.

That is the right filter for the rest of the decision. Age gives you a useful starting point, but it does not tell you enough. A strong balance sheet, guaranteed income, and years of work ahead can justify more equity risk. A weak income buffer and a near-term withdrawal need can justify less. The account type matters too. Money sitting in a taxable account, a traditional retirement account, or a Roth account can support different withdrawal choices, and those choices affect how much risk you can afford to keep.

The academic evidence points in the same direction. In a Columbia University working paper by Ameriks and Zeldes, the authors found that each additional year of age reduced stock allocation by about 93 basis points ( Columbia working paper ). That lines up with the long-used practitioner habit of trimming equity exposure by roughly one point per year of age.

For pre-retirees and retirees, the key question is simple. Can the portfolio keep funding spending if markets disappoint early in retirement? If the answer is no, age alone is too crude. Use it as the starting line, then adjust for income sources, account type, and drawdown risk. One useful reference point is this asset allocation guide , but the final mix has to fit the household, not the calendar.

The Core Mechanics of Age-Based Allocation

A portfolio is not one thing. It has separate jobs. Equities are there to grow purchasing power. Fixed income helps steady the ride and can also produce income. Cash equivalents give you flexibility when money is needed soon, and they keep you from being forced to sell at the wrong time.

That matters because the right mix is driven by what the money has to do. A household still in the accumulation phase can tolerate more market movement if the paycheck keeps coming. A household that is living off the portfolio has a different problem, because the portfolio now has to support spending as well as growth. In that setting, the allocation has to protect cash flow, not just chase return.

The logic is simple. Younger investors usually have a longer horizon, more time to recover from setbacks, and less near-term withdrawal pressure. Older investors often face the opposite, especially once retirement spending starts drawing money out of the account. That is where sequence risk becomes a real threat. A weak market early in retirement does more damage because withdrawals lock in losses and shrink the base that needs to recover.

The portfolio also has to match the account it lives in. Taxable accounts, traditional retirement accounts, and Roth accounts do not behave the same way when money is coming out. That changes which assets you want where, and it changes how much risk the household can reasonably keep. Age gives you a starting point, but income sources, account type, and drawdown risk decide whether that starting point is too aggressive or too cautious.

When the account is still being funded, volatility is annoying. When the account is funding spending, volatility becomes a cash-flow problem.

That is the rule I use. If the money will sit untouched for years, a higher equity share can make sense. If the money has to produce income soon, the portfolio needs more ballast and more liquidity. For a practical starting framework, use this asset allocation guidance , then adjust it for the household in front of you.

Classic Age Rules and Where Each One Breaks Down

Many investors have heard some version of 110 minus age, 100 minus age, or the old 60/40 split. Those rules are useful because they force a decision. They're also incomplete because they ignore the rest of the household balance sheet.

For a 55-year-old, the math looks like this:

110 minus age suggests about 55% stocks and 45% bonds and cash.
100 minus age suggests about 45% stocks and 55% bonds and cash.
60/40 suggests 60% stocks and 40% bonds , regardless of age.

What each rule gets wrong

The 110 rule can still leave a 65-year-old too exposed if retirement is already here and withdrawals are about to begin. It may be fine for a worker who still has years of stable income. It's much less comfortable for someone who's about to depend on that portfolio for living expenses.

The 100 rule can be too cautious for younger savers. A 30-year-old who's still accumulating and can tolerate volatility may give up too much long-term growth by following it mechanically.

The 60/40 split is the bluntest of the three. It ignores whether the household has a pension, Social Security coming soon, concentrated home equity, or a long runway before money is needed. It can work as a conversation tool. It fails as a personalized plan.

Age 110 Minus Age 100 Minus Age 60/40 Split

55 55% stocks 45% stocks 60% stocks

65 45% stocks 35% stocks 60% stocks

The right takeaway is simple. Use these rules to start the discussion, then break them if the household's actual situation calls for it. That isn't sophistication for its own sake. It's just honest planning.

Three Life Stages and Their Allocation Logic

What each rule gets wrong

The 110 rule can still leave a 65-year-old too exposed if retirement is already here and withdrawals are about to begin. It may be fine for a worker who still has years of stable income. It's much less comfortable for someone who's about to depend on that portfolio for living expenses.

The 100 rule can be too cautious for younger savers. A 30-year-old who's still accumulating and can tolerate volatility may give up too much long-term growth by following it mechanically.

The 60/40 split is the bluntest of the three. It ignores whether the household has a pension, Social Security coming soon, concentrated home equity, or a long runway before money is needed. It can work as a conversation tool. It fails as a personalized plan.

Age 110 Minus Age 100 Minus Age 60/40 Split

55 55% stocks 45% stocks 60% stocks

65 45% stocks 35% stocks 60% stocks

Age works better when you think in stages instead of birthdays. The same stock allocation can be sensible in one stage and reckless in another. The job of the portfolio changes as the household moves from earning, to protecting, to spending.

Accumulation means growth first

In the accumulation years, the main goal is simple. Keep contributing, keep costs down, and let time do the heavy lifting. Equity exposure usually stays high because the portfolio has years to recover from setbacks and because the dollar amounts are still building.

That doesn't mean every dollar belongs in stocks. It means the portfolio's center of gravity should favor growth assets, because a cautious portfolio can fall behind before the balance sheet has a chance to matter.

Pre-retirement means transition, not panic

The pre-retirement years are where people make the most mistakes. They get close enough to retirement to feel nervous, but they still need growth to keep up with spending and inflation. That's when the glide down should begin.

This is also when investors should start paying attention to where risk sits. A household can keep more growth inside the accounts that have the longest runway and more stability in the accounts that may fund early spending needs.

Retirement means income and durability

Once retirement starts, the portfolio is no longer just a growth machine. It has to produce cash flow and preserve purchasing power. A retiree who sells into a bad market year is not “patient.” They're creating a permanent setback.

That's why the retirement portfolio usually needs a larger stable-income sleeve and enough liquidity to avoid forced selling. The best allocation is the one that can survive withdrawals without panic.

How Glidepaths and Target-Date Funds Work

Target-date funds are built around a glidepath , a planned shift from more stocks to more bonds over time. The logic is sound. As retirement gets closer, the portfolio should become less exposed to a sharp market drop and better prepared to support withdrawals.

The direction is useful. The assumption that one glidepath fits every household is the weak point.

The academic wrinkle

MIT Sloan's modeling result points to a hump-shaped stock allocation over the working life. It pegs the optimal stock share around age 45 at 80% stocks, then shows it declining to a stable 60% in retirement ( MIT Sloan model ). That matters because it argues against a purely straight-line decline. Equity weight can peak in mid-career, then settle at a meaningful level even after work ends.

That is a more realistic view than the old habit of assuming older always means much lower stock exposure. It reflects two realities at once, labor-income stability and the rising importance of sequence risk as retirement approaches.

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What this means for you

If you are evaluating a target-date fund, look past the date on the label. Check where the fund lands at retirement and how much equity it still holds afterward. A glidepath that keeps some stock exposure can make sense, especially if you have pension income, delayed Social Security, or cash reserves outside the portfolio.

A target-date fund gives a clean starting point for someone who wants simplicity, and it still needs to fit the rest of the balance sheet. A household that depends on the portfolio for spending needs a different answer from one with outside income covering a large share of retirement cash flow. That is the line that matters.

The Variables That Override Age Alone

Age gets too much credit when people ignore the income already sitting outside the portfolio. That is the first thing I look at. A stable pension, Social Security timing, and other guaranteed income can change how much risk the portfolio needs to carry.

The more useful question focuses on income coverage, how much of your retirement spending is already secured before the portfolio has to generate income.

The factors that matter more than the calendar

Guaranteed income. A pension or Social Security reduces how much income the portfolio must produce.
Risk tolerance. Not the answer on a questionnaire, but the amount of market decline you can live through.
Time horizon. Money needed in the next few years should not be treated like money set aside for a decade out.
Liquidity needs. Emergency reserves reduce the need to keep stocks ready for a near-term sale.
Tax situation. Account type and tax treatment affect where different assets belong.

A teacher with a defined-benefit pension and a 403(b) can often afford a different mix than a same-age consultant whose brokerage account is doing all the heavy lifting. That is not a small detail. It changes the whole allocation decision.

A portfolio should be built around the withdrawals it must support, not around a neat chart that ignores the rest of the household.

The five years before and after retirement deserve special attention. That is when sequence risk can do real damage, because withdrawals start turning paper losses into permanent losses. If there is a pension, cash reserve, or delayed claiming strategy to lean on, the portfolio can usually carry a different shape than age charts suggest.

A Sample Household Allocation Across Accounts

A household with one spouse age 58 who has a pension, the other age 60 who has a 401(k) and an IRA, plus a taxable brokerage account, should not be treated as one flat age bucket. Social Security starts at 67, so the key question is how much of their spending is already covered before the portfolio has to step in.

Age alone would push you toward one generic mix across every account. That is too crude for a household that is already close to retirement.

Why each account should have a job

The pension changes the math first. It covers part of the retirement income floor, so the portfolio does not have to carry the entire burden. That often lets the 401(k) and IRA hold a more balanced mix than they otherwise would, because the household has a cushion outside market returns.

The taxable account needs a different role. It can serve as a spending buffer, which reduces the pressure to sell equities after a market drop. If cash reserves already sit outside the portfolio, that gives the household even more room to avoid forced sales at the wrong time.

Account type matters too. Traditional accounts and Roth accounts do not belong in the same box if tax efficiency is part of the plan. A household can use that flexibility to keep the overall mix sensible while still paying attention to future withdrawals and tax brackets.

Here is the right mindset:

401(k) or traditional IRA. Coordinate for the long run, not just this year.
Taxable brokerage. Keep enough liquidity to avoid panic selling.
Roth account. Treat it as a flexible reserve with a long horizon.
Pension income. Count it as part of the total allocation picture, because it changes the need for portfolio income.

A household like this does not need one magic number. It needs an integrated plan that fits how the money will be used. A fiduciary conversation matters because the answer by account is often better than the headline answer.

For some households, a retirement planner like Coast Wealth Management can help coordinate that mix across pensions, workplace plans, and withdrawal timing without forcing every account into the same model.

Rebalancing, Withdrawal Order, and What to Do Next

Good allocation isn't a one-time decision. Markets move, life changes, and your mix drifts. If you never rebalance, the portfolio slowly stops matching the risk you thought you had.

A clean approach is to rebalance on a schedule or when the mix drifts far enough to matter. Then write down the withdrawal order before you need it. That keeps a bad market year from turning into a bad decision.

Do this next: map your income floor, list every account, and decide which dollars are for the next five years versus the next fifteen.

The next steps are practical, not glamorous. Review the mix annually. Update it after a job change, pension decision, inheritance, divorce, or health event. Make sure the withdrawal sequence matches your tax picture and your spending needs.

If you want a portfolio that fits real retirement life, not a textbook age chart, Coast Wealth Management can help you build that plan around income, taxes, and withdrawal timing. Visit Coast Wealth Management to start a conversation about aligning your investments with the years ahead.

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