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The Strangest Secret About Retirement Planning

The Strangest Secret About Retirement Planning

| February 19, 2022

Have you ever taken a two-week vacation? Maybe you went on a ski trip to the Swiss Alps, explored the jungles of Brazil, or just simply took a road trip to a neighboring state. Regardless of where you went, you likely put in a lot of time researching and saving for your trip. Now picture your retirement as a 30-year vacation and imagine the amount of planning you need to do!

Luckily, planning for retirement does not need to be intimidating if you have a solid understanding of the three phases of retirement: accumulation, retirement, and distribution. You can read articles everywhere about the first two phases, but very little is written about distribution—the most complicated phase. I prefer to think of it like climbing a mountain. Retirement is the summit, but you still have to get down the mountain.

Why the Distribution Phase Matters

Many people work toward saving as much as they can or focus on getting the best return on their investments during the planning phase. But they forget there are things they can do to get the most out of their money once retired. Let’s discuss a few things people do wrong during the distribution phase of retirement.

Claiming Benefits at the Wrong Time

You most likely have prepared different income sources for your retirement, and drawing on income sources in the right order can have huge consequences. For instance, if you start drawing Social Security too soon, your benefit is permanently reduced. If your full retirement age (FRA) is 66 and you decide to begin receiving benefits at 62, your retirement benefit will be reduced by 25% and your spouse’s benefit would reduce by 30%. (1)

Paying Too Much in Taxes

Drawing too much money per year has the potential to increase your tax burden. You could push yourself into a high tax bracket, meaning more of your hard-earned savings goes to Uncle Sam. 

There is also the potential that you are not drawing enough income, which can incur penalties. Paying even the highest income tax bracket (37%) pales in comparison to the penalties that come from not meeting your required minimum distributions (RMDs) on your IRA plans. 

You could be hit with a penalty of 50% of the shortfall. For example, if you were supposed to take out $15,000 but only took $11,000, you would owe a penalty of $2,000 on top of income taxes on the shortfall. (2)

Not Updating Your Financial Plans

Financial planning isn’t a one-and-done process. Your life and the world will constantly take unpredictable turns. The markets go up and down, tax laws change, and your goals will shift throughout your golden years. Having a trusted financial professional that can help make the smartest choices is vital to a successful and happy retirement. If you want to see how your financial plan will hold up in the distribution phase of retirement, call our office at (443) 837-2520 or emailing my executive assistant, Talia Grover, at to set up a complimentary consultation.

About Brion

Brion Harris is the CEO, founder, and managing partner of Premier Planning Group, an independent financial firm specializing in working with pre-retirees and retirees, helping them create customized wealth preservation and retirement distribution strategies. With over 20 years of experience, Brion has developed deep knowledge and skill in helping his clients simplify their finances and find confidence in their financial future. Brion and the Premier Planning team are known for their unparalleled client service and their dedication building long-lasting relationships with their clients. As a result, Brion has been the recipient of the #1 Advisor Leadership Award* at Summit for seven years running. 

Brion is a proud 20-year resident of the Annapolis community, where he resides with his wife, Elizabeth, their three children, Addison, Jay, and Scarlett, and their two dogs, Pepper and Coco. When he’s not working, you can find him boating, skiing, traveling, and enjoying good food and music with his family. If you want to learn more about Brion, connect with him on LinkedIn.

*The #1 Advisor and Leadership award is based on production data and is awarded by the Summit Financial Networks region of Cetera Advisor Networks LLC. Brion Harris received the award in 2019, 2020, and 2021.  This award is not a guarantee of future investment success.  This recognition should not be construed as an endorsement of the advisor by any client. The #1 Advisor and Leadership award was based on production data while at Summit Brokerage Services, Inc. Brion Harris received the award in 2015, 2016, 2017, and 2018.  This award is not a guarantee of future investment success.  This recognition should not be construed as an endorsement of the advisor by any client.