Creative Planning Guidance for Recent Retirees

How guardrails protect income during an early market drop

A market decline during your first three years of retirement poses the greatest threat to portfolio longevity. If you sell depressed equities to pay monthly utility bills, those shares never recover to fund your later years.

Consider a hypothetical retiree with a $1,000,000 portfolio who targets an initial 5% distribution of $50,000 per year. If a severe market drop reduces that portfolio to $800,000, the effective withdrawal rate jumps to 6.25%. Under our flexible guardrails approach, you trim nonessential spending by 10% (drawing $45,000) until accounts recover, rather than liquidating equities at bottom prices.

No investment is guaranteed, and a portfolio can fall in value, sometimes for years, which is why maintaining twelve to twenty-four months of living expenses in cash equivalents helps avoid forced selling.

Which account should you tap first?

Taking withdrawals blindly from whichever account holds the most cash creates unnecessary income taxes. Creative Planning structures retirement income planning across taxable brokerage accounts, traditional pre-tax balances, and tax-free Roth assets.

If more than one-fifth of your net worth sits in concentrated company stock within a 401(k), evaluating net unrealized appreciation before executing 401(k) rollovers takes priority. We balance capital gains realizations with ordinary income brackets, ensuring you do not unintentionally push yourself into higher marginal rates.

• Draw from taxable brokerage accounts first to spend cash and take advantage of preferential long-term capital gains rates.
• Execute partial Roth conversions during lower-income gap years between your final paycheck and starting Social Security claiming.
• Preserve Roth IRA balances for later retirement decades or legacy transfers because qualified distributions remain completely tax-free.

At age 73 the withdrawals start

The federal government mandates required minimum distributions once you reach age 73 (or age 75 for those born in 1960 or later). Missing your annual cutoff triggers a steep 25% IRS excise tax on the amount you should have withdrawn.

For tax year 2026, married couples filing jointly face a standard deduction of $32,200, while single filers receive $16,100. Managing mandatory distributions in advance prevents your taxable income from spiking right into elevated brackets or triggering higher surcharges.

Managing 2026 Medicare IRMAA surcharges

Medicare Part B standard premiums for 2026 cost $202.90 per month, but high taxable income pushes you into income-related monthly adjustment amounts (IRMAA). Because the Social Security Administration evaluates your modified adjusted gross income from two years prior, 2024 income establishes your 2026 premium surcharge.

For joint filers in 2026, crossing $218,000 in modified income raises monthly Part B costs to $284.10 per person, while crossing $274,000 increases that cost to $405.80. Creative Planning advisors review every proposed portfolio sale against these sharp cliffs to ensure an extra dollar of distribution does not trigger thousands in surcharges.

Keeping beneficiary designations and estate documents current

Retirement marks the right moment to verify that legal titles align with your written plan. Outdated primary beneficiary designations on employer retirement accounts override whatever instructions you wrote inside a will.

Our team reviews transfer-on-death instructions, health care directives, and power of attorney designations. For clients with at least $500,000 in investable assets, closing gaps between account titles and intended heirs prevents unnecessary probate disputes.

• Verify primary and contingent beneficiaries on all IRA, 401(k), and annuity contracts.
• Confirm that designated agents on medical powers of attorney remain willing and capable.
• Check that real estate deeds and taxable brokerage accounts hold correct survivorship language.