Maximizing Retirement Savings: 6 Smart Strategies for Experienced Investors

As an experienced investor, you’ve likely already made significant strides in securing your financial future. However, there’s often room to optimize your retirement savings to ensure that you can retire on your own terms, without compromise. Here are some strategies to consider for enhancing your retirement savings:

1. Maximize tax-advantaged accounts

Take full advantage of tax-advantaged retirement accounts such as IRAs, Roth IRAs, and 401(k)s. For those over 50, the IRS allows “catch-up” contributions, giving you an extra boost in saving. If your income exceeds limits for direct Roth IRA contributions, consider a backdoor Roth IRA conversion, which could allow your funds to grow tax-free. And if you participate in a 401(k) plan, check to see if your plan allows Roth conversions. For some people, converting pre-tax funds to a Roth account can offer significant tax and retirement planning benefits.

2. Continue to stay diversified

A well-diversified portfolio is essential for managing risk and maximizing growth. With your longer-term goals in mind, aim for a balanced mix of equities, bonds, alternative investments, and tax-efficient vehicles. This is a good topic to discuss with your advisor. They may recommend asset allocation adjustments as you approach retirement to help shield your savings from market volatility.

3. Plan for required minimum distributions (RMDs)

Once you turn 73 (those born between 1951 and 1959) or 75 (for those born after 1959), the[SP1]  IRS requires that you begin taking distributions from traditional retirement accounts, which are taxable. You can mitigate the impact of these RMDs by planning ahead—perhaps by considering strategies like Roth conversions or charitable giving.

4. Utilize trusts for wealth transfer

Incorporating trusts into your estate plan can offer substantial tax savings and flexibility in wealth transfer. A well-structured trust can help ensure that any retirement funds left after you pass are distributed according to your wishes, while minimizing tax burdens on your heirs.

5. Review your Social Security strategy

Timing your Social Security benefits can have a significant impact on your retirement income. For many, delaying Social Security until age 70 maximizes the monthly benefit. Work with your advisor to develop a strategy that aligns with your broader retirement goals.

6. Remember health care costs

Health care can become one of the largest expenses in retirement. Consider long-term care insurance or a Health Savings Account (HSA) to protect your savings from unexpected medical costs. An HSA is an excellent tool if eligible, as it offers triple tax benefits and can be used to cover qualified medical expenses.

Stay informed and engaged

The financial landscape is always changing. Meet regularly with your advisor to review your retirement plan and adjust for changes in tax laws, investment opportunities, and your personal financial situation. We are here to help!