As you approach retirement, it's natural to view your IRA or 401(k) as a significant asset – a single, impressive number representing years of hard work and careful saving. You've diligently contributed, watched it grow, and now it's ready to support the retirement you've dreamed of. This is a common and understandable perspective. Many envision this account as the key to a comfortable and secure retirement. However, I've found that reframing how we look at these funds can be transformative, leading to a more fulfilling and intentional retirement.

Instead of seeing your retirement account as just an asset, I encourage my clients to view it as deferred spending. These dollars aren't simply numbers on a statement; they represent future experiences, opportunities, and the ability to live out your values. This shift in perspective is crucial because it aligns with how Congress and the IRS also view these funds.

Your IRA or 401(k) isn't just yours to control indefinitely. It's subject to tax regulations, and ultimately, these funds will be spent by one of three parties: you, the government, or your beneficiaries. This is where the estate planning concept of "Income in Respect of a Decedent" (IRD) comes into play. For legacy purposes, your retirement account is considered IRD, meaning it's subject to income tax when distributed.

Before the SECURE Act of 2019, beneficiaries could stretch out distributions from inherited IRAs over their lifetimes, minimizing the immediate tax burden. This often allowed more of the money to stay within the family. However, the SECURE Act changed the game. Now, most non-spouse beneficiaries have just ten years to withdraw the inherited funds. This compressed timeframe often results in higher tax brackets for beneficiaries, meaning the government can end up receiving a larger portion of your hard-earned savings than if you had utilized those funds during your lifetime.

This isn't about pushing anyone to withdraw money prematurely. It's about having an open and honest conversation about aligning your wealth with your values. It's about asking yourself: How can these deferred spending dollars enhance my life now? How can they fuel my passions, support my loved ones, and allow me to live a more meaningful life in retirement?

For some, this might mean traveling the world, pursuing a long-held hobby, or starting a new business. For others, it might involve supporting a cause they care deeply about, providing financial assistance to family members, or investing in their own well-being. There's no right or wrong answer. The key is to thoughtfully consider how you want to use these funds to create the retirement you envision.

This process often involves exploring questions like:

• What are my core values, and how can my spending reflect those values?
• What experiences would bring me the most joy and fulfillment in retirement?
• How can I use my resources to make a positive impact on the world around me?
• What legacy do I want to leave behind, and how can my financial decisions support that?

However, making this mindset shift and answering these questions can be incredibly challenging if you're stuck in a place of financial uncertainty. If you're constantly worried about whether you'll have enough money to last through retirement, or if you lack peace of mind about your financial future, it's difficult to embrace the idea of using your retirement savings for anything beyond basic needs.

This is where the importance of creating a comprehensive retirement income plan comes in. A well-structured plan will help you:

• Project your retirement income: Understand how much money you can expect to receive from various sources, including Social Security, pensions, and your retirement accounts.
• Estimate your retirement expenses: Get a clear picture of your anticipated living costs, including housing, healthcare, transportation, and leisure activities.
• Identify potential gaps: Determine if your projected income will be sufficient to cover your expenses, and if not, develop strategies to bridge the gap.
• Create a sustainable withdrawal strategy: Develop a plan for withdrawing funds from your retirement accounts in a way that maximizes their longevity and minimizes your tax burden.

By addressing these key areas, a solid retirement income plan can provide you with the financial clarity and confidence you need to make the mindset shift we've been discussing. When you have a clear understanding of your financial picture, you're better equipped to:

• Embrace the concept of deferred spending: Knowing that you have a secure income stream allows you to think more strategically about how to use your retirement savings to enhance your life.
• Align your wealth with your values: With financial peace of mind, you can more easily prioritize spending on the things that truly matter to you.
• Live a more intentional retirement: Instead of being driven by fear or scarcity, you can make conscious choices about how to use your resources to create the retirement you envision.

I believe this is a crucial conversation to have, and I'm here to help you navigate it. If you're ready to explore how to reframe your thinking about your retirement account and create a plan that gives you the confidence to do so, I encourage you to reach out and schedule a consultation. Let's work together to create a retirement plan that truly reflects your values and empowers you to live the life you deserve.