Author: eric

A common question from those nearing retirement: how can we prevent a single bad market year from disrupting everything we’ve built?

No strategy removes all market risk, but asset allocation can improve your ability to handle volatility and help you avoid pressured decisions. For families nearing or in the preservation phase of wealth, the structure of a portfolio becomes especially crucial.

What Asset Allocation Strategies Actually Do

Asset allocation is the distribution of a portfolio across different asset classes. These include equities, fixed income, cash, and alternatives. The proportions should reflect your goals, time horizon, and risk tolerance. The underlying principle is that different asset classes tend to respond differently to the same market conditions.

When equity markets decline, some fixed-income holdings may hold their value or decline. This depends on the interest rate environment and the types of bonds. When inflation rises, some asset classes may outperform others. By combining assets that do not move in step, a well-constructed portfolio may limit losses during tough periods, compared with one focused on a single asset class.

Diversification does not guarantee profits or eliminate risk. It primarily helps reduce concentration risk and provides greater flexibility in portfolio management during market stress.

Why Asset Allocation Matters More for Retirees

The stakes of asset allocation look different depending on where you are in your financial life. Someone still accumulating wealth, decades from retirement, may find a market decline painful but recoverable. For a family drawing income from a portfolio, the math changes considerably.

Research from BlackRock has noted that the CBOE Volatility Index, momentarily jumping above 31 in March 2026, drawing comparisons to 2020 and 2008. Their analysis highlighted that retirees face a particular challenge during volatile periods because they may need to sell assets to fund living expenses precisely when markets are depressed, thereby reducing the base available for future recovery.

This is the sequence-of-returns problem: investment losses early in retirement can compromise long-term financial security. To manage this, retirees often hold some assets in lower-volatility investments or cash, providing income without selling equities in downturns. Notably, nearly 70% of adults in EBRI’s 2025 survey, cited by the Urban Institute, believe default investment options are important for retirement security. In summary, managing risk and selecting appropriate defaults are both key takeaways for retirees.

If you would like to discuss whether your current allocation supports your income needs and timeline, we are glad to take a look. After our review, you’ll know whether your allocation aligns with your goals or if adjustments are needed.

How to Think About Portfolio Diversification Across Asset Classes

Portfolio diversification is often described as spreading risk, but a more useful way to think about it is to build a portfolio in which different components serve different purposes.

Equities may offer long-term growth potential, helping the portfolio keep pace with inflation over a retirement that may last 25 to 35 years or more. Fixed income may provide income and stability. However, the relationship between bonds and stocks has become more complex in recent years and may not behave as it did in prior decades. Cash and cash equivalents may offer liquidity and a buffer. This allows the rest of the portfolio to remain invested during short-term volatility, rather than being tapped for income at an inopportune time.

For high-net-worth families, alternative asset classes may also play a role. These can include real estate investment trusts, private credit, or other lower-correlation investments. Their suitability varies depending on the family’s circumstances, liquidity needs, and tax situation. Each category carries unique risks and may not be appropriate for every investor.

How Allocation Strategies Shift Across Life Stages

A portfolio designed for someone in their mid-forties looks different from one designed for someone who retired last year, and that difference is intentional.

Earlier in life, a higher allocation to equities may reflect a longer time horizon and the ability to withstand short-term volatility in pursuit of long-term growth. As retirement approaches and income needs become immediate, the allocation may shift to reliably generate income while keeping enough growth-oriented exposure to address inflation and longevity.

The critical transition point is often the five to ten years before retirement. This is sometimes called the pre-retirement window. Families who adjust their allocation thoughtfully during this period may have more flexibility when they actually retire. This can be more beneficial than waiting until retirement. Getting that positioning right before retirement begins is one of the more consequential planning decisions a family can make.

What to Do Now

Families evaluating their current asset allocation may benefit from working through a few areas with their advisor.

• Consider reviewing whether your current allocation reflects your actual time horizon and income needs. A portfolio built five years ago may no longer fit your situation. This is especially true if your retirement date has moved closer or your income needs have changed.
• Evaluate whether your portfolio has enough liquidity to fund near-term expenses without selling equity positions. Having one to two years of living expenses in lower-volatility holdings may reduce the pressure to sell at inopportune times during market stress.
• Assess your concentration risk. If a significant portion of your portfolio is concentrated in a single stock, sector, or asset class, that concentration may carry more risk than the overall allocation numbers suggest.
• Consider whether your diversification across asset classes still holds up in light of current market conditions. The relationship between stocks and bonds has shifted in recent years, and assumptions based on prior decades may no longer apply to the current environment.
• Key takeaway: Plan your allocation based on specific income needs for the next several years, not just total portfolio balance. This targeted approach can support greater confidence during volatile periods than focusing only on total account value.

Frequently Asked Questions

What are asset allocation strategies?

Asset allocation strategies are approaches to distributing a portfolio across different asset classes, such as equities, fixed income, cash, and alternatives, in proportions designed to reflect an investor’s goals, time horizon, and risk tolerance. The goal is to construct a portfolio in which different components serve distinct purposes and do not all respond to market conditions in the same way.

How does asset allocation help during market volatility?

A diversified allocation may reduce the severity of losses during volatile periods by ensuring that not all portfolio holdings decline at the same time or to the same degree. It can also preserve options: maintaining a liquidity buffer may allow a retiree to fund income needs without selling equity positions when markets are depressed. Diversification neither guarantees profits nor eliminates the risk of losses.

What are conservative investment strategies for retirees?

Conservative investment strategies for retirees generally involve a higher allocation to lower-volatility assets such as short-term fixed income and cash equivalents, combined with enough growth-oriented exposure to address inflation over a potentially long retirement. The specific mix depends on income needs, other sources of retirement income, tax situation, and time horizon, and there is no single allocation that is appropriate for every retiree.

How does asset allocation change as you approach retirement?

As retirement approaches, many investors shift their allocation toward a structure that can generate reliable income while maintaining some long-term growth exposure. The five to ten years before retirement may be a particularly important window for adjusting allocations, because decisions made during this period can affect a retiree’s flexibility in the early years of drawing income.

Does portfolio diversification eliminate investment risk?

Portfolio diversification may help reduce concentration risk and smooth a portfolio’s volatility over time, but it cannot eliminate investment risk. All investments carry the risk of loss, and a diversified portfolio can still lose value during broad market declines. Diversification is a risk management tool, not a guarantee of protection.

Key Takeaways

• Asset allocation strategies involve distributing a portfolio across asset classes in proportions that reflect goals, time horizon, and risk tolerance, ensuring that different holdings serve distinct purposes.
• Retirees face a distinct challenge during market volatility because they may need to fund income needs while markets are declining, which is why conservative investment strategies for retirees often emphasize maintaining liquidity alongside growth exposure.
• Portfolio diversification may help reduce the severity of losses during volatile periods, but it neither assures profits nor eliminates the risk of losses.
• The five to ten years before retirement may represent an important window for adjusting allocation, as decisions made during this period can affect flexibility in early retirement income.
• There is no single asset allocation that is right for every family at every life stage, and the appropriate mix depends on income needs, other retirement income sources, tax situation, and personal tolerance for volatility.

 

TL:DR Asset allocation strategies help structure a portfolio so that different holdings serve different purposes and do not all respond to market conditions in the same way. For families in or approaching retirement, thoughtful allocation may reduce the pressure to sell assets during volatile periods, though no strategy can eliminate investment risk entirely. Individual circumstances vary significantly, and the appropriate allocation for any family depends on income needs, time horizon, tax situation, and tolerance for volatility.

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When families begin working with us, I emphasize that our team personally manages their money – we do not outsource. I believe this direct involvement is crucial when deciding whom to trust with your investments.

Many financial planning firms separate the planning function from investment management: advisors build the plan, and a third-party money manager or model handles investments. At Great Lakes Private Wealth, we prioritize active investment management, with financial planning built around it. For families focused on preserving wealth, this structure may lead to more responsive portfolios when conditions shift.

What Active Investment Management Means in Practice

Active investment management generally means a real person is monitoring your portfolio with your specific situation in mind, making adjustments based on current market conditions, your tax picture, and life changes. A structured, research-driven process evaluates what is happening and determines whether action is warranted, rather than following a predetermined formula regardless of context.

Why Hands-On Wealth Management Matters During Volatility

Markets do not move in straight lines. Periods of volatility create conditions in which the structure of a portfolio and the judgment of its manager may matter considerably more than in calm markets.

Some automated or model-based approaches follow predefined rules. A hands-on approach assesses whether current conditions warrant changes in positioning, risk exposure, or sector allocation. This flexibility doesn’t guarantee better outcomes but allows for informed judgment rather than preset rules.

For families with significant assets, the implications of a portfolio drifting through a difficult period without active oversight may be particularly meaningful when income is being drawn rather than accumulated. A retiree drawing income from a portfolio has a different recovery timeline than someone decades from retirement, which is one reason active oversight during volatile periods tends to be a more relevant consideration for the families we work with.

The Role of Tactical Portfolio Strategies

Tactical portfolio strategies are used to make deliberate, short-term adjustments to asset allocation in response to current market conditions while keeping long-term goals in focus. The core role of these strategies is to introduce flexibility within an overall investment approach, allowing portfolios to adapt to changing environments without abandoning their original objectives.

Strategic allocation sets long-term asset targets. Tactical allocation considers near-term conditions for possible temporary adjustments. A CFA-informed approach emphasizes systematic, research-driven analysis, not speculation.

Markets typically move in cycles, and no one can predict every turn. What a structured process can do is evaluate current conditions with discipline and make informed decisions about whether the evidence supports staying the course or making a measured adjustment. Staying engaged with a portfolio’s strategy throughout the year, rather than reviewing it only at year-end, supports ongoing evaluation.

What CFA Portfolio Management Looks Like for Families

For high-net-worth families, portfolio management by a CFA could mean that investment decisions made on their behalf are grounded in rigorous analysis of securities, economic conditions, and portfolio construction principles that the CFA program focuses on.

It also means the advisor managing the money has met a demanding standard for professional ethics and accountability. The CFA Institute’s ethical standards require charterholders to put client interests first, maintain independence in their analysis, and disclose conflicts of interest. For families evaluating advisors, those commitments are worth understanding as a baseline of what the credential requires.

We manage client portfolios using our proprietary process. We do not delegate this responsibility. If the portfolio needs attention, we handle it. That is the role of a money manager first.

Feel free to reach out to discuss what active portfolio oversight might look like for your family’s specific situation.

What to Do Now

Families evaluating their current investment management relationship may benefit from asking a few direct questions.

• Consider asking who manages your portfolio. Ask whether the advisor you meet with is the same person making the day-to-day investment decisions, or whether those decisions are delegated to a model or third-party manager. The answer may change how you evaluate the relationship.
• Understand the process. Ask your advisor to describe the process they use to evaluate whether your portfolio needs adjustment during periods of volatility. A clear, structured answer suggests an active approach. A vague one may suggest a more passive tone.
• Review how frequently your portfolio is monitored. Active investment management means ongoing oversight, not quarterly check-ins. Consider whether your current arrangement reflects that level of attention.
• Evaluate whether your advisor holds credentials aligned with investment management. Understanding the credentials your advisor holds and the requirements they have may help you assess the depth of their investment expertise.
• Assess whether your plan and portfolio are managed as a coordinated whole. Families whose financial planning and investment management are handled separately often experience coordination gaps that become apparent at the worst possible moments.

Frequently Asked Questions

What is active investment management?

Active investment management is the practice of making ongoing, research-driven decisions about a portfolio’s composition and positioning to respond to changing market conditions and individual client circumstances. It involves a real person monitoring and adjusting the portfolio rather than following a predetermined, rules-based model.

How does CFA portfolio management differ from standard financial planning?

Most financial planning firms focus on building a financial plan and then delegate investment management to a model portfolio or third-party manager. CFA portfolio management means the credentialed advisor is directly responsible for analyzing and managing the investments. For high-net-worth families, that distinction may be relevant to how their portfolios are monitored and adjusted over time.

What are tactical portfolio strategies?

Tactical portfolio strategies involve making deliberate, shorter-term adjustments to a portfolio’s asset allocation based on current market conditions, while maintaining alignment with the client’s long-term investment goals. They represent one component of an active management approach that evaluates whether near-term evidence supports staying the course or making a measured adjustment.

Why does active management matter during market volatility?

During volatile periods, the ability to evaluate current conditions and make informed adjustments may be more consequential than during stable markets. Some automated or model-based approaches follow predetermined rules regardless of context, whereas active management enables judgment-driven responses to changing conditions. Past performance of any approach is not indicative of future results, and no investment strategy can guarantee protection from market losses.

Key Takeaways

• Active investment management means a credentialed professional directly monitors and adjusts your portfolio based on current conditions and your specific situation, rather than following a predetermined model.
• Tactical portfolio strategies involve shorter-term adjustments to asset allocation based on market conditions, evaluated through a structured analytical process rather than intuition or speculation.
• For high-net-worth families in or approaching retirement, the distinction between active and passive portfolio oversight may carry more weight than during the accumulation years.

Understanding who manages your portfolio, what process they follow, and what credentials they hold is a reasonable question to ask in any advisory relationship.

 
TL:DR Active investment management through a CFA-trained advisor means your portfolio is monitored and adjusted by a credentialed professional with a structured, research-driven process, rather than a model or third-party manager. For high-net-worth families in or approaching the preservation phase of wealth, that level of hands-on oversight may be particularly relevant during periods of market volatility. Past performance of any investment approach is not indicative of future results, and no strategy can guarantee protection from market losses.

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After forty years in this business, I have seen many people reach their target retirement number, only to find that having enough on paper does not equate to genuine freedom. They saved diligently and retired financially secure yet spent the first two years anxiously questioning whether their money would truly last.

In my experience, a common obstacle is the gap between financial independence on paper and actual financial confidence. Accumulating assets is only half the equation. The underestimated half is knowing how to strategically use, help protect, and draw on those assets with a well-designed plan that supports a decades-long retirement.

Why the Number Alone Does Not Create Financial Independence

Most conversations about financial independence start and end with a target number. That focus makes sense as a planning tool, but it misses the fuller picture of what retirement readiness requires.

According to Northwestern Mutual’s 2026 Planning and Progress Study, Americans believe they need $1.46 million to retire comfortably in 2026, up more than 15% from the prior year. The same study found that 46% of Americans do not expect to be financially prepared for retirement, and nearly half believe they are somewhat or very likely to outlive their savings.

For high-net-worth families, the math may look better, yet concerns about outliving savings remain common even at higher asset levels. That’s because taxes, withdrawal sequencing, healthcare costs, inflation, and legacy goals shape whether a retirement income plan holds up, variables that all require deliberate planning beyond just calculating a starting balance.

Financial Independence Requires a Well-Designed Income Architecture

Many families who feel genuinely free in retirement share one characteristic: they have a clear, coordinated income plan that shows where every dollar of living expenses is coming from and why each source is sustainable.

That architecture typically draws from multiple streams. Social Security benefits, whose timing decisions can significantly affect outcomes, form one layer. Portfolio distributions form another. For business owners, rental income, deferred compensation, or proceeds from a sale may add additional layers. The coordination of those sources, including which accounts to draw from first, how to manage taxes across them, and how to adjust as circumstances change, can shape whether the overall plan functions as intended.

Generally, understanding income sources before retirement starts may offer more flexibility than planning afterward. The pre-retirement years can offer an opportunity to make important structural decisions and work toward optimizing outcomes.

Retirement Readiness Goes Beyond Savings Balances

A 2025 national retirement readiness study by IRALOGIX measured Americans’ preparedness across five dimensions: savings and investments, healthcare readiness, lifestyle and spending, emotional well-being, and economic confidence. The national score came in at 45.8 out of 100, placing the country in the moderate risk zone for retirement preparedness.

In my experience, this finding is consistent with what I often observe. Savings often look adequate while other parts of retirement readiness lag. Healthcare for families retiring before Medicare is often under planned. The psychological leap from saving to spending is also widely underestimated. The order of tax-efficient asset drawdown receives less attention than the question of how much to save.

Financial independence requires addressing all of those dimensions, not just the balance sheet.

The Behavioral Side of Retirement Income Planning

One often overlooked element of financial independence is the behavioral shift it demands. For years, discipline has centered on saving more and spending less. Retirement, however, requires a new mindset: drawing from what you’ve built with confidence rather than anxiety.

That reversal is harder than many people expect. Research has consistently found that retirees tend to underspend relative to what their assets could support, often out of fear of running short.

A 2025 study by research fellows David Blanchett and Michael Finke, covered by Kiplinger, found that actual retirement withdrawal rates are significantly lower than traditional financial models suggest, with the authors attributing much of the gap to the psychological difficulty of transitioning from saving to spending amid uncertainty.

Many families who navigate this transition smoothly share two common resources: a written income plan that may help reduce uncertainty around monthly spending, and an advisor relationship that can help address both the behavioral and financial dimensions of the retirement transition.

What Financial Independence Looks Like in Practice

In practice, financial independence in retirement means more than just reaching a number. It requires a plan specific enough to guide decisions, yet flexible enough to adapt as conditions change. Knowing your withdrawal rate, understanding the tax impact on every income source, having a healthcare funding strategy, and keeping estate documents aligned with your current intentions all contribute to true independence.

For business owners, it also means separating the retirement income question from the business exit question and answering both. Those two conversations need to happen together, and families who address them in parallel may have more flexibility than those that treat the business sale as a prerequisite for beginning retirement planning. Results vary based on individual circumstances.

The goal of retirement income planning is to support your desired lifestyle without constant monitoring or reactive decisions. This requires more than a number. It needs a rigorously built, tested, and reviewed plan that can help address changing circumstances.

Feel free to reach out to discuss what that process might look like for your situation.

Contact Great Lakes Private Wealth

What to Do Now

Families nearing retirement may benefit by assessing a few areas before the transition becomes urgent. Proactive evaluation may help reduce surprises and support greater peace of mind.

• Map your income sources and sequence. Identify every source of retirement income you expect to draw from, including Social Security, portfolio distributions, rental income, and any business-related proceeds. Confirm that someone is coordinating how those sources work together, not treating each one in isolation.

• Review your withdrawal strategy against your tax picture. The order in which you draw from taxable, tax-deferred, and Roth accounts affects your annual tax bill, Medicare premium costs, and Social Security taxability. If that sequencing has not been deliberately planned, it is worth examining before distributions begin.

• Assess your healthcare funding plan. If you intend to retire before age 65, confirm that you have a specific plan for covering healthcare costs during the gap before Medicare eligibility. Underestimating those costs is one of the most common gaps in otherwise well-constructed retirement plans.

• Revisit your estate documents. Financial independence includes confirming that your assets are positioned to transfer in accordance with your intentions. Beneficiary designations, trust structures, and titling should be reviewed any time your circumstances change.

• Evaluate whether your income plan addresses longevity. A retirement beginning at 62 or 65 may need to fund expenses for 25 to 35 years. Confirm that your withdrawal strategy has been modeled across a time horizon that reflects that reality.

Frequently Asked Questions

What does financial independence mean in retirement?

Financial independence in retirement means having a coordinated income plan structured to help cover your living expenses from carefully selected sources, without requiring you to deplete savings faster than intended or to make reactive financial decisions under pressure. It encompasses income architecture, tax efficiency, healthcare funding, and estate planning, not just a savings balance.

How much do you need to retire comfortably?

According to Northwestern Mutual’s 2026 Planning and Progress Study, Americans believe they need an average of $1.46 million to retire comfortably. However, high-net-worth families typically require more detailed planning that accounts for taxes, healthcare, legacy goals, and withdrawal sequencing specific to their situation. Individual circumstances vary significantly, and a target number without a supporting income plan tends to provide less confidence than the number alone suggests.

What is retirement readiness?

Retirement readiness refers to how well prepared an individual or family is to sustain their intended lifestyle throughout retirement. It encompasses savings and investment levels, healthcare coverage, income coordination, withdrawal strategies, estate planning, and behavioral preparedness for the transition from accumulation to distribution. Research from IRALOGIX found the national retirement readiness score to be 45.8 out of 100 in Q1 2025, indicating broad gaps across multiple dimensions of preparation.

When should retirement income planning begin?

Retirement income planning is most effective when it begins five to ten years before the anticipated retirement date, during the pre-retirement window when structural decisions about account positioning, tax strategy, and income sequencing can still be refined. Beginning that planning after the transition has already happened may leave fewer options and less time to adjust course.

What do high-net-worth families get wrong about retirement income planning?

High-net-worth families most commonly underestimate the complexity of withdrawal sequencing across multiple account types, under plan for healthcare costs during the pre-Medicare window, delay coordinating the business exit and retirement income questions, and neglect to update estate documents to reflect current intentions. Having significant assets addresses the resource question but does not resolve the planning and coordination questions that can influence how well those assets perform over the long term of a retirement.

Key Takeaways

• Financial independence in retirement requires a coordinated income plan, not just a target savings number, and the gap between the two is often where retirement confidence problems originate.

• According to Northwestern Mutual’s 2026 study, 46% of Americans do not expect to be financially prepared for retirement, and nearly half believe they are likely to outlive their savings.

• Retirement readiness encompasses healthcare funding, tax efficiency, withdrawal sequencing, and estate planning, not only investment balances.

• The behavioral transition from saving to spending is often underestimated and can benefit from a written income plan that may help reduce uncertainty around monthly decisions.

• Business owners may benefit from addressing retirement income and business exit questions in parallel rather than sequentially.

 

TL:DR Financial independence in retirement requires considerably more than reaching a savings target. It depends on a coordinated retirement income plan that addresses withdrawal sequencing, tax efficiency, healthcare costs, longevity, and estate planning, all of which can shape whether the assets on paper translate into genuine financial confidence in practice. Individual circumstances differ considerably, and building that plan before the retirement transition begins may provide more flexibility than constructing it after the fact.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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One of the most common questions I hear from families as they approach retirement sounds deceptively simple. How do I make sure the money lasts?

It is a fair question, and the honest answer is that making money last in retirement requires a different kind of thinking than the accumulation phase that came before it. For decades, the goal was to save as much as possible. In retirement, the goal shifts to creating a sustainable withdrawal rate and a reliable income stream that holds up over what could be a very long time horizon, while adapting to changing markets, expenses, and life circumstances along the way. Getting that transition right matters, and it deserves a clear framework.

Why a Single Number Is Not Enough for Retirement Income Planning

Many people approach retirement income planning by identifying a single safe withdrawal rate and applying it mechanically. The 4% rule is the most widely referenced starting point, suggesting that withdrawing 4% of your portfolio in the first year of retirement and adjusting annually for inflation may sustain a 30-year retirement with a high probability of success.

That framework has its uses as a planning benchmark. Fidelity’s research on sustainable withdrawal rates suggests that aiming to withdraw no more than 4% to 5% of savings in the first year of retirement, then adjusting for inflation, is a reasonable starting estimate. Their research also highlights that your actual sustainable withdrawal rate depends on factors you cannot fully control, including how long you live, what markets do, and what inflation looks like across your retirement years.

For families with significant assets and complex financial lives, treating the 4% rule as a fixed answer rather than a starting conversation tends to create problems over time. Your withdrawal rate in any given year should reflect your current circumstances, not a figure set on the first day of retirement and never revisited.

Building Flexibility Into Your Withdrawal Strategy

One of the most important decisions in retirement income planning is how much flexibility to build into your spending. A fixed withdrawal approach provides predictability, but it can also mean drawing down your portfolio at an uncomfortable rate during a poor market year, or leaving significant wealth unspent during strong years by sticking rigidly to a set number.

A dynamic withdrawal strategy adjusts the amount you take each year based on portfolio performance and market conditions. During years when your portfolio has grown, you may be able to draw more. During years when markets have pulled back, reducing discretionary spending can help preserve the base that generates future income. Morningstar’s ongoing research on safe withdrawal rates has consistently found that retirees who maintain flexibility in their spending tend to be better positioned across different market environments than those using a rigid fixed withdrawal approach.

For families who want to maintain a consistent standard of living, one practical approach is to separate essential expenses covered by reliable income sources from discretionary expenses funded from the investment portfolio. The essential layer provides stability. The discretionary layer creates room to adapt when conditions change.

How Longevity Affects How to Make Money Last in Retirement

Retirement income planning without accounting for longevity creates an incomplete picture. People are living longer, and a retirement that begins at age 62 or 65 may need to fund 25 to 35 years of expenses or more. Charles Schwab’s research on the 4% rule notes that a 30-year time horizon may not be sufficient for all retirees, particularly those who retire early or come from families with a history of longevity.

For business owners and high-net-worth families, the longevity dimension connects directly to estate planning and wealth transfer goals. A retirement income plan that draws down assets too aggressively in the early years may achieve a comfortable lifestyle while leaving less than intended for the next generation. A plan that is overly conservative out of caution may leave a family living well below what their assets could comfortably support.

Getting the balance right requires modeling your specific situation across multiple scenarios rather than applying a generalized rule. Individual results vary considerably, and there is no withdrawal rate that carries a guarantee across all market conditions and time horizons.

Coordinating Withdrawals With Your Tax Picture

Retirement income planning and tax planning are the same conversation, and families who treat them separately often leave meaningful efficiency on the table. The sequence in which you draw from taxable, tax-deferred, and tax-free accounts affects your annual tax bill, your Medicare premium costs, and how much of your Social Security income becomes taxable each year.

For families with assets across multiple account types, the groundwork laid before retirement begins creates the flexibility to manage that coordination well. Roth conversions during lower-income years, strategic charitable giving through qualified charitable distributions, and thoughtful sequencing of which accounts to draw from first are tools that work better when built into the plan early rather than improvised after the fact. Tax laws change and individual situations vary, so working with a qualified tax professional alongside your financial advisor is an important part of building a withdrawal strategy that holds up over time.

Building a Plan That Fits Your Actual Retirement

A sustainable withdrawal strategy works best when it is built around the actual shape of your retirement, not a theoretical average. Your spending in the first decade of retirement may look very different from your spending in the third.

Healthcare costs tend to rise over time. Travel and major expenses are often concentrated in the early years. Estate and gifting goals evolve as family circumstances change. A plan that acknowledges that variability and builds in regular review points tends to serve families better than one set at retirement and left unchanged. Staying engaged with your strategy throughout retirement rather than setting it and stepping back is one of the more consistent differences I see between families who feel confident about their retirement income and those who do not.

If you would like to work through what a sustainable withdrawal strategy might look like for your specific situation, feel free to reach out. We are glad to have that conversation.

Contact Great Lakes Private Wealth

Frequently Asked Questions

What is a sustainable withdrawal rate in retirement?

A sustainable withdrawal rate is the percentage of your portfolio you can withdraw annually throughout retirement without running out of money over your expected time horizon. Research suggests starting at 4% to 5% in the first year and adjusting for inflation, though the right rate depends on individual factors including life expectancy, asset allocation, and other income sources.

Does the 4% rule still apply in 2026?

The 4% rule remains a widely used starting benchmark, but it was developed based on historical market data and a 30-year retirement horizon. Morningstar’s 2024 research suggested a more conservative starting rate of 3.7% given current equity valuations, while Fidelity’s research supports a 4% to 5% range depending on circumstances. Individual situations vary significantly, and the rule is best used as a conversation starter rather than a fixed answer.

How do taxes affect retirement withdrawal strategy?

The sequence in which you draw from taxable, tax-deferred, and Roth accounts affects your annual tax bracket, Medicare premium surcharges, and what percentage of your Social Security income becomes taxable. Coordinating withdrawal sequencing with a qualified tax professional may improve overall tax efficiency meaningfully over the course of a long retirement.

How long does retirement income need to last?

A retirement beginning at age 62 or 65 may need to fund 25 to 35 years of expenses or more, depending on health and family history. Planning for a longer horizon than you expect to need tends to be more forgiving than underestimating your longevity, particularly for families with wealth transfer goals.

 

TL:DR A sustainable withdrawal rate should be individualized, factoring in your retirement time horizon, spending flexibility, tax situation, and longevity. Avoid depending entirely on a fixed percentage. Families with significant assets benefit from a coordinated and adaptable approach that links withdrawal sequencing with tax planning and regularly reviews plans. Flexibility and ongoing review are key to ensuring your retirement income lasts.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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After forty years in this business, I have seen intelligent, successful people make the same common retirement mistakes over and over. Many are completely avoidable. Significant wealth does not shield you from these errors, and in some cases, it amplifies the consequences.

The families who navigate retirement well understand what can go wrong before it happens. This is what I see most often.

Ignoring the Sequence of Returns Risk

Most people understand market risk during their saving years. Fewer realize how that risk changes fundamentally once withdrawals begin.

Sequence of returns risk is the danger of experiencing significant market losses early in retirement while simultaneously withdrawing from your portfolio. Research from Charles Schwab illustrates this clearly: two investors starting with identical portfolios and identical withdrawal rates can end up in dramatically different financial positions depending entirely on when a major market decline occurs. The investor who faces a significant drop in the first two years of retirement may run out of money far sooner than one who experiences the same decline a decade later.

For families with substantial assets, the concern is often less about whether the money runs out and more about whether poor early sequencing forces them to sell assets at depressed prices, permanently reducing the base available for future growth. A withdrawal strategy that accounts for market conditions rather than simply drawing from the most accessible account can make a meaningful difference over a long retirement. The years immediately before retirement are among the most important for getting that positioning right.

Getting the Retirement Withdrawal Order Wrong

Many retirees draw from their accounts in whatever order feels most straightforward, often depleting taxable accounts first, then tax-deferred accounts, then Roth accounts. That sequence may work for some people, but for high-net-worth families, it could leave significant tax efficiency on the table.

Your withdrawal order affects your annual tax bracket, how much of your Social Security income becomes taxable, whether you trigger Medicare IRMAA surcharges, and what you leave behind for heirs. For families with $3.5 million or more spread across multiple account types, coordinating withdrawal sequencing deserves as much attention as the investment strategy itself.

Tax laws change, and individual circumstances vary widely, so there is no single correct sequence that applies to everyone. Working through this with a qualified tax professional alongside your financial advisor may help identify a more efficient approach for your specific situation. If you would like to discuss what that coordination looks like in practice, we are glad to talk through it.

Mishandling Required Minimum Distributions

Required Minimum Distributions trip up even well-organized families. Beginning at age 73, the IRS requires minimum annual withdrawals from tax-deferred retirement accounts, and missing those deadlines or miscalculating the amounts can trigger a 25% excise tax on the amount that should have been withdrawn.

For families with large pre-tax balances, RMDs can become a significant and growing forced income event each year, pushing income into higher tax brackets, increasing Medicare premiums, and affecting the taxation of Social Security benefits. Treating RMDs as an isolated compliance task rather than a coordinated part of your overall income strategy is a mistake that tends to become more expensive over time.

The years between retirement and age 73 present a window to consider strategies that may reduce future RMD exposure, including Roth conversions during lower-income years. Whether that makes sense depends on your specific tax situation, and the analysis requires modeling across multiple years. Consulting a qualified tax professional before acting is an important step.

Underestimating Healthcare Costs in Retirement

Healthcare tends to be significantly underestimated in retirement budgets, particularly for families who retire before Medicare eligibility at age 65. Covering private insurance during that gap and then supplemental coverage once Medicare begins can add up more quickly than most projections account for.

Business owners who have had employer-sponsored or business-sponsored coverage for decades often underestimate how substantially the picture changes when those costs shift to personal funding. Building realistic healthcare estimates into your retirement income plan, including provisions for long-term care, is a step that pays dividends well before those costs arrive.

Treating the Estate Plan as a One-Time Event

A retirement plan and an estate plan are related documents, and many families update estate documents once and consider the work done. Beneficiary designations, trust structures, and asset titling need to be reviewed regularly because life changes and tax laws change, and what gets overlooked in those documents can create significant problems for the people left behind.

Outdated beneficiary designations on retirement accounts are a particularly common issue. Those designations override whatever a will says, which means an account can pass to the wrong person if the designations have not been updated after a divorce, a death in the family, or a change in your intentions.

What to Do With This

None of these mistakes requires extraordinary circumstances. They happen to be smart, successful people who did not have a coordinated plan that addressed each of these areas before retirement began.

The time to address the sequence of returns risk, withdrawal sequencing, RMD strategy, healthcare costs, and estate document maintenance is before you need any of them to perform under pressure. If you would like to review where your current plan stands in any of these areas, feel free to reach out. We are glad to take a look.

Contact Great Lakes Private Wealth

Frequently Asked Questions

What are the most common retirement mistakes high-net-worth families make?

The most frequently observed retirement mistakes among families with significant assets include ignoring sequence of returns risk, drawing from accounts in a tax-inefficient order, mishandling Required Minimum Distributions, underestimating healthcare costs, and failing to update estate documents as life circumstances change.

What is the sequence of returns risk in retirement?

Sequence of returns risk refers to the danger of experiencing significant market losses early in retirement while simultaneously making withdrawals from your portfolio. Because losses early in retirement reduce the base available for future growth, the timing of a market decline can affect long-term outcomes more significantly than the average return over the full retirement period.

When do Required Minimum Distributions begin?

Under current IRS rules, Required Minimum Distributions from tax-deferred retirement accounts generally begin at age 73. Missing the deadline or withdrawing less than the required amount can trigger a 25% excise tax on the shortfall. For individuals born in 1960 or later, the RMD age is scheduled to increase to 75 beginning in 2033.

Why does withdrawal order matter in retirement?

The sequence in which you draw from taxable, tax-deferred, and tax-free accounts affects your annual tax liability, Medicare premium costs, and how much of your Social Security income becomes taxable. For high-net-worth families with assets across multiple account types, coordinating that sequence with a tax professional may improve overall tax efficiency over the course of a long retirement.

 

TL:DR High-net-worth families make predictable retirement mistakes, including poor withdrawal sequencing, mishandled RMDs, underestimated healthcare costs, and neglected estate documents, and each of these errors tends to be more expensive at the scale of wealth these families have accumulated. Most of these mistakes are avoidable with coordinated planning that addresses each area before retirement begins, rather than after the damage is done. Individual circumstances vary significantly, and working with qualified financial and tax professionals is an important part of building a plan that holds up over a long retirement.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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Father’s Day has a way of making you think about what you are building. For most of the business owners I have worked with over the past four decades, the business is not just a source of income. It is the thing they poured themselves into that created opportunity for their family, and in many cases, what they hope their children will carry forward.

That hope deserves serious attention. Successfully passing on a family business is harder than it looks, and the window to prepare for it is shorter than most owners realize. Succession planning for a family business is not a single event. It is a years-long process, and the families who start it early tend to have significantly more options than those who wait.

The Data Behind the Succession Gap

The numbers on family business succession planning are worth knowing before assuming you have more time.

According to the U.S. Small Business Administration, only 30% of family-owned businesses survive into the second generation, and only 12% make it to the third. A separate PwC 2023 US Family Business Survey found that only 34% of family businesses reported succession planning had impacted their business in the past year. That figure has changed little over the prior two years.

Those numbers do not reflect how much owners care. They reflect how easy it is to push succession planning aside when the business is running, clients need attention, and everything feels under control.

According to a 2024 Gallup study of business owners, roughly one in three business owners either lack a long-term succession plan or are unsure what will happen to their business after they leave. Among owners approaching retirement age, only about 17% report active plans to sell or transfer ownership. The rest are still figuring it out, or hoping it figures itself out. It does not work that way in practice.

What Family Business Succession Planning Actually Involves

Succession planning is widely misunderstood as primarily a legal exercise, something to hand off to an attorney when you are ready to exit. The legal documents are important, but they come near the end of a much longer process.

The real work starts years before any transaction or transfer happens. It involves identifying whether anyone in the next generation wants to run the business and whether they have the skills and temperament to do so well. Those two things are not always the same answer, and confusing one for the other is one of the more painful and expensive mistakes I have seen families make.

If a family member is the intended successor, the preparation process generally includes giving them meaningful responsibility earlier than they feel comfortable, honestly exposing them to the business’s financial picture, and creating structured accountability so they can develop leadership credibility with employees and customers. That process takes years, and starting it late means compressing a development timeline that cannot be rushed.

If a sale to a third party is the more likely outcome, the preparation is equally demanding. Building a business that can operate without you, documenting systems and processes, diversifying the customer base, and understanding what buyers in your industry actually look for in an acquisition target all take time and significantly affect the business’s value when the time comes. Business sale outcomes vary widely depending on market conditions, deal structure, and preparation, and there are no guarantees about valuation or timing.

The Financial Planning Piece That Gets Missed Most Often

Many business owners reach their exit without a clear picture of what they need for the sale or transfer to provide for the rest of their lives. That problem surfaces at exactly the wrong moment.

The retirement income question and the business exit question need to be answered together. If the business is the primary asset and the exit proceeds are expected to fund retirement, then the retirement plan is only as strong as the exit plan. A sale that falls short of expectations, a deal structure that delays cash flow, or a valuation that comes in lower than anticipated can significantly affect what follows. Understanding what your retirement income picture might look like before you are in the middle of a transaction is considerably more useful than working through it after the fact.

Getting those two conversations coordinated early gives you options. Waiting until you are already in the exit process leaves far fewer of them.

The Conversation Most Owners Keep Avoiding

For many fathers, the hardest part of succession planning is the conversation itself. Telling your children what you envision for the business, what you expect from whoever takes it over, and what happens if the right successor is not in the family requires a level of directness that most people find uncomfortable.

I have watched families avoid that conversation for years, operating on assumptions that turned out to be completely misaligned. A father who assumed his son wanted to run the business, or a son who assumed his father expected him to sell it. Both of them were building toward different futures without ever saying so out loud. That kind of misalignment is preventable, and it is far less painful to address before an exit than during one.

If your succession plan is incomplete, or if you have not yet had the real conversation with your family about what the business transition actually looks like, starting that process with a structured framework and an outside perspective tends to make it considerably more productive. Feel free to reach out if you would like to talk through where to start.

Frequently Asked Questions

What is family business succession planning?

Family business succession planning is the process of identifying, preparing, and transitioning leadership and ownership of a business to the next generation or a third-party buyer. It typically involves years of preparation, including their development, financial planning, and legal structuring.

When should a business owner start succession planning?

Most advisors suggest starting the succession planning process at least five to ten years before an anticipated exit. Starting earlier provides more options for their development, tax planning, and deal structuring, and reduces the pressure of compressing a complex process into a short window.

What happens if a family business has no succession plan?

Without a succession plan, the business may face leadership gaps, family conflict, forced sales at unfavorable terms, or dissolution. According to the U.S. Small Business Administration, only 30% of family-owned businesses survive into the second generation, and the absence of planning is among the most commonly cited contributing factors.

How does a business sale affect retirement planning?

For owners whose primary asset is the business, the sale proceeds often represent the foundation of their retirement income. Coordinating the exit plan with a retirement income plan before the transaction happens may help ensure the financial picture after the sale supports the lifestyle and legacy goals the owner has built toward. Individual results vary, and outcomes cannot be guaranteed.

 

TL:DR Family business succession planning requires considerably more time and preparation than most owners allow for, and the data suggests that a significant majority of family businesses are underplanned for the transition ahead. Preparing the next generation, whether through ownership transfer or a third-party sale, involves both business development work and coordinated financial planning, and the two processes work best when they happen together rather than sequentially. The conversation with your family about the business’s future is the place to start, and starting it earlier creates more options than starting it late.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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The middle of the year has a way of sneaking up on people. Tax season is behind you, summer is ahead, and somewhere in between, your portfolio has been moving in ways you may not have looked at closely since January.

That gap matters more than most people realize. Markets move, allocations drift, and the strategy you set at the start of the year may look quite different from what you built it to be. A mid-year investment portfolio review helps you assess where things stand, realign your investments with your goals, and position yourself well for the second half of the year. Waiting until December to do this work tends to leave fewer options on the table.

Why Portfolio Drift Happens and Why It Matters

Portfolio drift occurs when one part of your portfolio grows faster than another, causing your actual allocation to deviate from your original targets.
Consider a straightforward example. If you began the year with a target of 60% equities and 40% fixed income, and equities have had a strong run, your actual allocation may now look closer to 70/30 or higher. That shift means you are carrying more risk than your original plan called for, often without realizing it.”Research on portfolio rebalancing illustrates this clearly: a portfolio that is never rebalanced can migrate toward a significantly higher equity concentration over time, changing its risk profile in ways that may no longer align with your goals.

For families approaching or already in retirement, that kind of unintended risk increase deserves particular attention. Your time horizon and income needs differ from those of a younger investor, and your portfolio should reflect those differences at every point throughout the year, not just at year-end.

If you would like a second set of eyes on your current allocations, we are glad to take a look.

What a Mid-Year Investment Portfolio Review Actually Covers

A thorough mid-year review goes well beyond checking account balances. It involves three core areas of assessment.

The first is allocation alignment. You are checking whether your current holdings still match your original targets, and whether any positions have grown large enough to create concentration risk you did not intend.

The second is the tax picture. CNBC has reported that financial advisors increasingly treat mid-year rebalancing as a tax-planning opportunity rather than a purely risk-driven exercise. Trimming positions that have appreciated significantly in taxable accounts, harvesting losses where they exist, and redirecting contributions toward underweighted areas are all actions that can improve a portfolio’s overall efficiency when done intentionally.

The third is tactical asset allocation. Economic conditions in the second half of the year often look different from the first. A review gives you the chance to evaluate whether your positioning aligns with the current environment and your evolving needs.

The Difference Between Reviewing and Reacting

A mid-year review is a scheduled, disciplined process. It is not a response to a bad week in the market, and keeping that distinction clear matters.

Many investors check their portfolios more frequently during volatile periods, and that increased attention tends to produce decisions driven by emotion rather than strategy. Research has consistently found that reactive behavior, selling into declines and returning to markets after they have recovered, can weigh meaningfully on long-term results. A structured review removes the emotional component by making the process a function of calendar and criteria rather than headlines.

The questions a review is designed to answer are straightforward: Has my portfolio drifted from its targets by a meaningful amount? Have changes in my personal circumstances created a need for adjustment? Does my overall approach still make sense given where the year has gone?

When Life Changes Also Call for a Portfolio Review

A mid-year review is also a natural checkpoint for personal changes since January. A business sale, a retirement date that has moved closer, a significant expense on the horizon, or a shift in your family situation can all affect how your portfolio should be positioned.

For business owners, especially, the connection between business events and investment strategy is often treated as two separate conversations when they should be one. If your business had a strong first half and you took a distribution, that income affects your tax picture for the year, which in turn affects decisions about where gains should be realized and where losses may be harvested. Keeping those pieces coordinated within a single financial picture is one of the more consistent differences between families who feel in control of their financial lives and those who do not.

How to Use the Second Half of the Year

Going into the second half of the year with a clear picture of where your portfolio stands gives you a meaningful advantage. You know what needs to be adjusted, what is working as intended, and what decisions you may want to make before December, when everyone else is trying to do the same things at the same time.

The families I work with who feel most confident about their finances are the ones who stay engaged with their strategy throughout the year rather than checking in only when something feels wrong. A mid-year review is one of the most straightforward ways to stay on that side of the equation.

If you would like to schedule a mid-year portfolio review, feel free to reach out. We are glad to make time for that conversation.

Frequently Asked Questions

What is a mid-year investment portfolio review?

A mid-year investment portfolio review is a structured assessment of whether your current holdings, allocation, and investment strategy still align with your financial goals and personal circumstances as of the midpoint of the year.

How often should I rebalance my portfolio?

Portfolio rebalancing frequency depends on your individual situation. Still, many financial advisors recommend reviewing your allocation at least twice a year and rebalancing whenever your allocation drifts from your target by a meaningful threshold. Tax considerations and transaction costs are also factors in that decision.

What causes portfolio drift?

Portfolio drift occurs when different asset classes grow at different rates, causing your actual allocation to drift away from your intended targets over time. Equities growing faster than fixed income during a strong market run is a common example.

When is the best time to harvest tax losses?

Tax-loss harvesting can occur at any point during the year. Still, a mid-year review often surfaces opportunities that might otherwise be missed if the review is delayed until year-end, when time and options may be more limited.

 

TL:DR A mid-year investment portfolio review may help identify allocation drift, tax planning opportunities, and strategic adjustments before the second half of the year begins. Markets rarely move in straight lines, and a scheduled review allows families to make decisions based on criteria and goals rather than reacting to short-term conditions. For business owners and high-net-worth families especially, connecting portfolio decisions to the broader financial picture twice a year tends to produce better outcomes than waiting until year-end.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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After forty years in this business, the question I hear most from business owners nearing retirement is simple: How much do I need?

The honest answer is that the number is different for everyone. Any advisor who gives you a one-size-fits-all figure without understanding your specific situation is doing you a disservice. Still, there is a framework for thinking through this question that can give you something useful to work with.

Why the Generic Retirement Numbers Do Not Apply to You

Every year, surveys report an average target for retirement savings. According to Northwestern Mutual’s 2026 Planning and Progress Study, Americans say they need $1.46 million to retire comfortably in 2026. The same study found that high-net-worth individuals, those with more than $1 million in investable assets, say they expect to need closer to $2.67 million on average.

Those numbers may be useful context for a general audience, but they do not describe your situation. A business owner who has spent three decades building a company and accumulating real estate, while holding concentrated stock positions and running income through a complex tax structure, has a retirement picture that looks nothing like that of the person who saved in a 401(k) through a single employer.

Your retirement number depends on your lifestyle costs, income sources, tax impact, and how long your funds must last. Calculating this correctly is the key to effective planning.

Start With Income, Not Assets

A common mistake is focusing only on total assets rather than on the income those assets generate. Assets matter, but income is what supports your lifestyle.

A useful starting point is to identify your monthly expenses in retirement and work backward from there. What does your lifestyle actually cost? Healthcare, housing, travel, family support, charitable giving, and taxes all factor into that number. Several of these are often underestimated.

Healthcare alone deserves serious attention. Many business owners retire before Medicare eligibility at 65, which means several years of covering those costs out of pocket. The gap between what people budget for healthcare and what it actually costs in retirement is one of the more consistent planning blind spots I see in practice. Once you have a realistic income target, map your income sources. For business owners, these may include investment distributions, Social Security benefits, rental income, proceeds from a business sale, deferred compensation, and possibly continued business involvement in a reduced role. Each source has different tax rules, timings, and levels of certainty.

The Business Sale Creates a Unique Set of Challenges

For many business owners, the sale of the business represents the largest single financial event of their lives. It is also one of the most common places where retirement planning breaks down.

It’s important to clarify that business value is not the same as the proceeds you receive from a sale. Taxes, deal structure, earnouts, and transition requirements can all impact the actual amount you take home. Relying on the full sale price as liquid, investable capital when planning for retirement often leads to surprises.

The time to consider the retirement implications of a business sale is before the sale happens. This means understanding tax exposure, deciding how to invest proceeds, and determining whether your post-sale income actually supports your desired lifestyle. We’ve covered how some pre-retirement transition decisions play out in an earlier post. It may be worth reading along with this one.

Taxes Are Part of the Calculation, Not an Afterthought

Business owners who have accumulated wealth in tax-deferred accounts, real estate, or business interests are sitting on assets that carry embedded tax liabilities. When you start drawing on those assets in retirement, the tax treatment affects how much income you actually receive from each dollar withdrawn.

The order in which you draw from different accounts, which accounts you use for which expenses, and how you time Social Security can all affect your overall tax picture. This is not a set-it-and-forget-it calculation. Ongoing attention is needed as tax laws change and income sources evolve. Consulting a qualified tax professional alongside your advisor is crucial to building a plan that holds up.

How to Think About Your Number

There is a straightforward retirement planning framework for high-net-worth individuals. Estimate your annual spending needs, including inflation and healthcare. Identify all sources of income and their after-tax value. Calculate the gap between your income sources and the lifestyle you require. That gap is what your portfolio must cover.

A commonly referenced guideline suggests that a portfolio may support annual withdrawals of around 3.5% to 4% over a long retirement horizon, though that figure depends on your specific asset allocation, time horizon, and market conditions. Individual results can vary considerably, and there is no guarantee any withdrawal rate will sustain a portfolio for any specific period.

Business owners with $3.5 million or more in investable assets generally have more flexibility than the average retiree. The main risk is not having too little. It’s building a plan that is careless with taxes, sequence of returns, and income coordination. Discovering a gap late is a bigger concern than falling short on assets.

If you would like to work through what that calculation looks like for your specific situation, we are glad to have that conversation. Reach out when you are ready.

 

TL:DR There is no universal retirement number for business owners. The calculation depends on lifestyle costs, income sources, tax structure, and how your business sale proceeds are handled. High-net-worth individuals need to focus on income planning, not just asset targets. Taxes are central to that analysis throughout retirement. Getting the framework right early is easier than correcting it later.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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Memorial Day has a way of cutting through the noise. For one weekend, people slow down, gather with family, and think about what actually matters. For those of us who have spent decades building something, that reflection can turn toward a question worth sitting with: when you are gone, what will you actually leave behind?

However, as you reflect, it’s important to look beyond just assets. The families who navigate wealth transfer best realize that the values behind the wealth matter as much as the dollars.

Most Families Are Less Prepared Than They Think

According to Caring.com’s 2024 Wills and Estate Planning Study, only 32% of Americans have a will, the lowest rate since 2020. Among those without one, 43% cite procrastination as the main reason.

That pattern holds even for people with significant assets. According to research compiled by Vanilla, over a third of American adults say they or someone they know experienced family conflict directly because an estate plan was not in place. That is a preventable outcome, and it happens far more often than it should.

The families I have worked with for decades are not immune to this. Good intentions do not, on their own, translate into a good plan. At some point, the conversation has to happen, and the documents have to be done.

A Legacy Plan and an Estate Plan Are Related, but They Are Not the Same Thing

An estate plan handles the legal and financial mechanics of transferring your assets. It is essential. A legacy plan goes further and addresses the values, purpose, and meaning behind what you are leaving.

Think about it this way. You can have a technically perfect estate plan, with updated beneficiaries, a funded trust, and proper titling on every account, and still leave your family without the clarity they need. What did you want the money to do? What values were you trying to extend? What did you hope they would understand about how you built it?

Those questions do not live in a legal document. They live in conversations, in letters, in family meetings, and in the relationships you build while you are still around to build them. The legal structures carry the assets. The values carry the meaning.

What a Values-Based Legacy Plan Actually Looks Like

Families who approach legacy planning intentionally tend to address a few areas that are often skipped in standard estate-planning conversations.

The first is a clear articulation of what wealth is for. A family that has built a successful business over 30 years has very different values around money than a family that inherited its wealth. Getting those values stated explicitly, in whatever form works for your family, can help the next generation make decisions in the spirit of what you intended rather than guessing.

The second is their preparation. Having the right legal documents in place matters far less if the people receiving the assets have no framework for managing them. This is one area where including the next generation in planning conversations early can create a meaningful difference over time.

The third is keeping the plan current. Beneficiary designations, trust structures, and estate documents need to be reviewed regularly as your life and the law change. A plan built ten years ago around a business you no longer own, or that still names an ex-spouse, can create significant problems. Reviewing it on a schedule rather than waiting for a crisis is how good intentions actually become a good outcome.

The Conversation Most People Keep Postponing

Memorial Day is a useful signal that we do not get unlimited time to have the conversations that matter. The families I have seen navigate wealth transfer most successfully are not the ones with the most sophisticated legal structures. They are the ones who talked openly about money, values, and expectations while everyone was still at the table.

According to research from Vanilla, 83% of investors are concerned that the current wealth transfer will not go smoothly. That concern is warranted. However, it is also addressable. The solution tends to start with a conversation rather than a document, and the earlier those conversations begin, the more prepared everyone tends to be.

If your legacy plan has been sitting on the to-do list, use this weekend to move it forward. Take the next step: contact me today to discuss what that process could look like for your family.

 

TL;DR: Family legacy planning addresses both the legal transfer of assets and the values you want to pass on. Research shows that most Americans, even those with significant wealth, are less prepared than they realize, which often affects their families. Establishing the right structures and having honest conversations with those who will inherit your wealth are best done well before they become urgent.

This information is for educational purposes only and is not intended as investment, tax, or legal advice. Past performance is not indicative of future results. Investment advisory services offered through Summit Financial, LLC, a SEC Registered Investment Advisor. Individual results may vary. There is no guarantee that any investment strategy will achieve its objectives. Links to third-party websites are provided for your convenience and informational purposes only.

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