Jamie Burton

Protecting your situation against inflation is more than a financial buzzword – it’s an essential part of planning for life after work. Inflation, once an afterthought in retirement discussions, has returned to the spotlight. With prices rising at noticeable rates, particularly since the COVID era, it’s become clear that managing inflation is critical to preserving long-term purchasing power.

Inflation is now being positioned alongside death and taxes as one of life’s unavoidable constants. And like the other two, inflation can be planned for and managed with intention. This starts with understanding that retirement isn’t a brief phase; it’s a journey that often lasts 25 to 30 years. Planning for that duration means preparing for the persistent erosion of value that inflation can cause.

Too often, people focus heavily on insurance as their only form of protection. While insurance plays a role, the more impactful approach lies in the broader strategy, specifically, the income plan. Having a strong income plan can determine whether individuals can confidently maintain their lifestyle throughout retirement. That plan needs to address not only immediate needs but also allow for flexibility to adapt as circumstances change.

One of the key ideas in addressing inflation is recognizing how time frames affect money. Not all retirement dollars are needed at the same time, and not all money should be treated the same. For example, funds intended for use in the next year or two may need to be held conservatively, while money not needed for ten or more years should be positioned for growth.

This breakdown can be thought of in three categories:

• Now: Dollars needed within the next 12 months – typically safer, more liquid funds.
• Soon: Money expected to be used in the next five to seven years – moderately allocated.
• Later: Funds not needed for 10+ years – allocated for long-term growth, potentially with equity exposure.

With this framework, each bucket of money is aligned with its purpose. This eliminates confusion and provides structure, especially in the face of fluctuating markets or inflation spikes. When people hold too much in low-return vehicles, like CDs or savings accounts, it may feel safe in the short term, but it puts long-term stability at risk. Inflation quietly eats away at those earnings over time.

Rather than reacting emotionally to market changes, this approach gives people clarity and control. Understanding when certain funds will be used helps guide how they should be invested, reducing the temptation to make fear-driven decisions.

Ultimately, the aim is to give families confidence in their financial plan. Inflation doesn’t have to be a source of anxiety. With an intentional income strategy that matches resources to timelines, people can enter retirement with assurance that their plan is working behind the scenes – protecting not just their money, but their lifestyle.

Key takeaways include the following:

• A long retirement horizon demands strategic income planning.
• Inflation should be treated as a predictable risk, not a temporary event.
• Structuring money into “now,” “soon,” and “later” categories provide clarity.
• Long-term assets should be positioned for growth to combat rising costs.

With the right mindset and a solid structure, inflation can become manageable and easier to plan for.

Financial Enhancement Group is an SEC Registered Investment Advisor.

When people think about IRAs, they usually think about saving. And yes, IRAs are great tools for building retirement wealth. But here’s the real secret: it’s not about how much you save – it’s about what tax buckets you save into and how you take it out.

IRAs play a powerful role in your retirement plan, but without a clear withdrawal strategy, they can quickly become a tax burden. Managing an IRA properly isn’t just about investments; it’s about timing, taxes, and thoughtful planning.

The two primary types of IRAs include Traditional and Roth. Traditional IRAs are funded with pre-tax dollars. They grow tax-deferred, but every dollar you withdraw in retirement is taxed as income. Once you reach age 73, the IRS requires you to start taking Required Minimum Distributions (RMDs), whether you need the money or not.

Roth IRAs work differently. You fund them with after-tax dollars, but qualified withdrawals are tax-free. Even better, you will have no RMDs during your lifetime. That gives you more flexibility and control over your retirement income.

This difference creates opportunities—especially for something called a Roth conversion. That’s when you move money from a Traditional IRA into a Roth IRA, pay taxes now, and let the money grow tax-free moving forward. But it needs to be done with intention.

Roth conversions can be especially helpful for the following:

• Reducing your future taxable income.
• Taking advantage of low-income years before RMDs begin.
• Leaving tax-free assets to your beneficiaries.

However, converting too much in a single year can bump you into a higher tax bracket. That’s why it’s important to work with an advisor and develop a multi-year plan that aligns with your goals and income needs.

An IRA also affects more than just your taxes. It impacts your overall retirement income strategy, Social Security timing, and even Medicare premiums. That’s why your IRA shouldn’t be viewed in isolation – it should be part of a bigger, integrated financial plan.

It’s also crucial to consider your legacy. Under the SECURE Act, most non-spouse beneficiaries must drain inherited IRAs within 10 years. That can create big tax bills for your kids if you haven’t planned accordingly. Roth IRAs, on the other hand, can be passed on tax-free.

One common mistake is getting emotionally attached to the account balance. You’ve watched it grow for decades, so pulling from it can feel uncomfortable. But retirement is about distribution, not hoarding. You saved this money for a reason – now it’s time to use it wisely.

At Financial Enhancement Group, we use a process called Defined Distribution™ – an intentional approach to IRA withdrawals that balances income needs, tax efficiency, and long-term goals.

If you’ve done the hard work of saving, make sure you have a plan for what comes next. Because the power of an IRA isn’t just in how it grows – it’s in how it’s used.

Financial Enhancement Group is an SEC Registered Investment Advisor.