Retirement Is Freedom

2/2024

By Brian O’Neill, CFP®

“But wouldn't you like to know
How it feels to live
Like a free man
To give
When there's nothing in your hand
Run like only the river can
Like a free man”
Angie Aparo

For many (I would suggest for all of our clients), retirement is the dream. Though I can honestly say that my career has been my avocation as well as my vocation, not everyone can state the same. They look forward to retirement, and in some ways, view it as freedom. The freedom to do what they want, when they want, in whatever way they want to do it. But let’s not pretend – retirement isn’t easy. Why is that?

My partner Chris Conkell and I discussed in our most recent podcast episode that retirement is a very recent phenomenon. 1800s farmers didn’t retire; they worked until they couldn’t work anymore. The human brain has been hard wired to hunt and gather, to provide for loved ones, and to work. Retirement, while freeing in some ways, can also present challenges to those thousands of years of wiring. What will I do every day? Can I really afford to spend my assets? Can I replace my colleagues with others who fulfill me? How did I get this “Honey Do” list?

At Cahaba Wealth Management, we spend a great deal of time working with our clients prior to retirement to help them begin to think through this. One of the hardest concepts for our clients to accept is that when they retire, they will begin to deplete those assets that they have spent a lifetime saving. This requires approaching life with an “Abundance” mindset – the belief that there are enough resources and successes to share with others.

If we believe that a client does not have enough assets and/or income streams to retire, we deliver that message with empathy. While not fun, having that conversation is part of our job and we take that responsibility seriously. There is no more important asset than a client’s ability to earn income.

A more satisfying message for us to deliver is that yes, there is enough. To that end, we must ensure clients stay within their plan at and throughout retirement. That means ongoing checkups to avoid the trap of spending too much, but also to ensure they spend enough (or at least the amount upon which our plan was based) to enjoy their lives. 

I have had the great fortune of helping clients for nearly 28 years. It is so gratifying to receive notes or pictures from my clients showing how they have used their money to enrich their lives. Be that a dream home, a trip with family, a charitable donation, or helping send that child or grandchild to college, the “Abundance” mindset that good financial planning can accomplish is what gets me up in the morning. Freedom is not always freedom from something; better stated, it is the freedom to do or be what you want. Here’s hoping retirement can lend a hand in creating that freedom.

Slightly grainy picture of a client’s view of Mount Everest from an airplane, taken January 2024.

Brian O’Neill, CFP® is a financial advisor in the Atlanta office of Cahaba Wealth Management, www.cahabawealth.com.

Cahaba Wealth Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Cahaba Wealth Management is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Content should not be construed as personalized investment advice. The opinions in this materials are for general information, and not intended to provide specific investment advice or recommendations for an individual. Content should not be regarded as a complete analysis of the subjects discussed. To determine which investment(s) may be appropriate for you, consult your financial advisor.

Ep. 13 – Retirement Readiness (Part 1)

Exploring the emotional component to retirement, and how your financial plan can encourage you to take the leap!

Cahaba Wealth Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Cahaba Wealth Management is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Content should not be construed as personalized investment advice. The opinions in this materials are for general information, and not intended to provide specific investment advice or recommendations for an individual. Content should not be regarded as a complete analysis of the subjects discussed. To determine which investment(s) may be appropriate for you, consult your financial advisor.

Updates for 2024

12/2023

As the calendar turns to the New Year, taxpayers can anticipate a series of changes in the IRS landscape, ushering in a fresh set of regulations and provisions that will impact both individuals and businesses alike. Here are a few important changes to know ahead of 2024:

Retirement Plan Limits

 2024 Limits2023 Limits
401(k)/403(b)/457(b) Elective Deferrals$23,000$22,500
Traditional and Roth IRA$7,000$6,500
Catch-Up Contribution (plans other than SIMPLE plans)$7,500 (no change)$7,500
SIMPLE Plan Employee Deferrals$16,000$15,500
SIMPLE Plan Catch-Up Contributions$3,500 (no change)$3,500
Plan Max. Annual Contribution – Defined Contribution Plans$69,000$66,000
Maximum Annual Benefit – Defined Benefit Plans$275,000$265,000
Compensation Limit under Section 401(a)(17)$345,000$330,000

Health Savings Account Limits

 2024 Limits2023 Limits
HSA Self-Only Coverage           $4,150$3,850
HSA Family Coverage$8,300$7,750
HSA Catch-Up Contributions (Age 55+)$1,000 (no change)$1,000

Standard Deductions*

 2024 Limits2023 Limits
Single$14,600$13,850
Married Filing Jointly$29,200$27,700
Head of Household$21,900$20,800
*an additional deduction will apply for taxpayers who are age 65+ and/or blind

Other changes for 2024:

  • In addition the changes mentioned above, 2024 will bring revisions to the tax brackets, exemptions and credits, and limitations.
  • A 3.2% cost-of-living adjustment (COLA) will be applied for Social Security retirement and disability beneficiaries.
  • The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $168,600.

If you’re curious how the new changes will affect your bottom line, we are here to talk about your plan. As always, we appreciate the opportunity to be of service.

We wish you a joyful and fulfilling New Year!

Sources:

https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024
https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000#:~:text=WASHINGTON%20%E2%80%94%20The%20Internal%20Revenue%20Service,up%20from%20%2422%2C500%20for%202023.
https://www.irs.gov/pub/irs-drop/rp-23-34.pdf
https://www.ssa.gov/cola/

Cahaba Wealth Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Cahaba Wealth Management is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Content should not be construed as personalized investment advice. The opinions in this materials are for general information, and not intended to provide specific investment advice or recommendations for an individual. Content should not be regarded as a complete analysis of the subjects discussed. To determine which investment(s) may be appropriate for you, consult your financial advisor.