Thinking About Retiring Early? Don’t Overlook the Rule of 55

Contributed by: Sandra Adams, CFP®

As a financial advisor, one of the most common questions I hear from clients considering early retirement is: "How can I access my retirement funds before age 59 ½ without penalty?" If you are asking that too, let's discuss an often-overlooked option: the Rule of 55.

The Rule of 55 allows you to withdraw money from your 401(k) or 403(b) without the usual 10% early withdrawal penalty if you leave your job in the year you turn 55 or later. This can be a helpful tool if you are retiring early and need income before other sources like Social Security, pensions, or IRAs kick in.

Here is the key: this rule applies only to the retirement account with your most recent employer. It does not work with old 401(k)s you have rolled into an IRA, so timing and account structure matter. That is why reviewing your plan before making any moves is important.

I have worked with clients who successfully used the Rule of 55 to bridge the income gap during early retirement—while keeping their long-term investments on track. With the right strategy, it can be part of a broader plan that balances your ability to draw income now with the freedom to draw from other sources of income later. And even if you don't ultimately need to draw on the funds, but you might, keeping at least a portion of your 401(k) balance in-tact to allow you the ability to draw on it "in case" could be a smart move until you reach that magic age 59 ½ if you haven't built up significant reserve savings or after-tax investment account balances to draw on.

If you are thinking about retiring before 59 ½ and may need access to your retirement savings, it is best to map out the best path for your unique situation. There's no one-size-fits-all solution, but with careful planning, you can avoid surprises and make the most of your hard-earned savings.

Early retirement is possible—just make sure you are stepping into it with a plan that supports your lifestyle and your future. If you or anyone you know is considering early retirement and might need to think through their options, do not hesitate to reach out. We are always happy to help! Sandy.Adams@CenterFinPlan.com.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandy Adams, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Giving Back Without Giving Away Too Much: Tax-Smart Strategies for Charitable Donations

Contributed by: Lauren Adams, CFA®, CFP®

We all have an interest in making the world a better place for our families and the generations to come. That’s why many of us give money, time, and resources to help support charities we believe in to make a difference for others in need, the towns and cities we live in, and the planet. But what if you could donate to organizations to support their efforts and get a tax deduction while doing it? Well, you can, and the tax code even incentivizes it!

At The Center, one of our favorite ways to improve lives is by helping our clients make a positive impact on the world through what we call “tax-savvy charitable giving.” While many people give charitably by writing a check, digging into their wallets for cash, or putting a donation on their credit cards, we’re here to tell you there’s a better way! We can deploy several key strategies to help our client’s charitable dollars stretch even further while lowering their tax burden.

Strategy #1: Gifting Securities Instead of Cash

Our first strategy deals with taxable assets like the ones in brokerage accounts. Instead of donating cash, donating securities that have appreciated in value—like stocks, ETFs, or mutual funds—could be a better way.

If you’ve been investing for a long time, you likely have shares that have increased in value. Normally, whenever you sell those shares, you pay taxes on the capital gains associated with that growth. But if you give those appreciated shares to charity, you can deduct the fair market value of those shares without paying capital gains taxes. You can even decide to buy those shares right back after you donate them, which raises the cost basis of your holdings and, ultimately, helps lower your future tax bill if and when you decide to sell (lowering your tax burden in retirement when you start drawing on your portfolio).

In addition to being a tax-advantaged way to donate to charity, this strategy can also help if you have a large concentrated stock position—where a considerable percentage of your portfolio is composed of one or a few stocks—to trim that concentration risk without triggering a hefty tax bill.

Again, there are caveats: You need to make sure you’ve held the security for more than a year, and there are IRS limits on how much you can deduct in a given year as a percentage of your overall income. And if the stocks depreciate in value, the tax benefits don’t apply. And make sure to keep your tax preparer in the loop along the way.

Strategy #2:  Donating Directly From Your IRA

This strategy involves a concept called the Qualified Charitable Distribution (QCD). How does it work? Instead of taking a distribution from your IRA, paying taxes on the amount withdrawn, and sending that money to your checking account, QCDs allow you to send money directly from your IRA to the charity of your choice. In essence, it’s a transfer of assets from your IRA to one or more qualified nonprofits.

However, there are some caveats: You need to be at least 70.5 years old, and the charity has to be a 501(c)(3), meaning a tax-exempt nonprofit whose earnings support the advancement of its charitable cause. Also, there are limits on how much you can give each year—but that number is relatively high. In case you’re wondering, in 2025, it’s up to $108,000 per person per year.

Usually, distributions from your IRA are taxed when they’re received. But with a QCD, they become tax-free as long as they’re transferred to an eligible nonprofit organization. Giving directly from your IRA results in those dollar amounts not being included in your gross income for that year, which results in a lower tax bill for you. It can also lower the amount you may pay for Medicare premiums and the portion of Social Security taxable to you, depending on your situation and income level.

For those of you who have reached the milestone age, a QCD also counts toward satisfying the distributions you must take each year for your Required Minimum Distribution, the amount the government makes you withdraw from your IRA each year once you hit a certain age (generally, 73-75). This is especially useful if you don’t need your full RMD to live on or plan to give charitably (now you’re doing so in a more tax-efficient manner!).

Strategy #3:  Exploring Donor Advised Funds

Let’s start with a quick history lesson. The 2017 Tax Cuts and Jobs Act significantly raised the standard deduction many now enjoy on their tax returns. This means you have to give a lot more to charity than you did in the past to push you above the standard deduction amount to see a reduction in your tax bill for the charitable dollars you donate.

For this reason, we often recommend clients lump or bunch several years of charitable gifts to help push them over that standard deduction amount in one year. This works to a client’s advantage if they’ve had an exceptionally high-income year due to something like selling a business before retirement. That’s when we suggest a Donor Advised Fund or Family Foundation, which is like a charitable investment account where you can donate, get the tax benefit now and then give a gift to the charities you care about later. And guess what? These strategies can be combined, meaning you can decide to gift appreciated securities to one of these special accounts, allowing you to avoid capital gains tax and lump together your gifts to maximize the overall deductions you’re able to recognize over time. For instance, a client in one of their highest income years may decide to bunch 5-10 years of future gifting into a charitable account AND use appreciated securities to do so!

Strategy #4 (and Beyond): Estate Planning Techniques

To further increase our clients’ charitable tax planning, we often collaborate with their estate planning attorneys to shift the beneficiaries of their pre-tax retirement accounts to the charities they would like to support upon their death. That leaves their investment accounts and other after-tax assets to friends and family. Because charities (unlike people) don’t pay income taxes when they are beneficiaries, this strategy could end up saving our clients’ heirs thousands of dollars in future income taxes when they eventually inherit retirement account money.

These are just a few of the strategies we recommend for our clients. But regardless of the strategy employed, one thing is always true for us at The Center: Helping our clients get the most bang for their charitable buck is one of the many reasons why we love what we do!

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Enjoyed this blog? Boost your financial confidence with our book, Finding Your Center: Achieving Confidence Through Financial Planning. Click HERE to learn more and get your copy.

If you're in the Metro Detroit area, join our book tour and receive a FREE copy!

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Lauren Adams, CFA®, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lauren Adams, CFA®, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

What is an “In-Service” Rollover?

Contributed by: Nick Defenthaler, CFP®, RICP®

When you hear "rollover," you typically think of retirement or changing jobs. For the vast majority of clients, these two situations will really be the only time they will complete a 401k rollover. However, you might not know about another type of situation in which you can move funds from your company retirement plan to your IRA. This is what's known as the "in-service" rollover and is an often-overlooked planning opportunity. 

Rollover Refresher

A rollover is a pretty simple concept. It is the process of moving your employer retirement account (401k, 403b, 457, etc.) over to an IRA that you have complete control over and is entirely separate from your employer plan. Most people do this when they retire or switch jobs. If completed properly, rolling over funds from your company retirement plan to your IRA (and vice versa) is a tax and penalty-free transaction because the tax characteristics of a 401k and IRA are generally the same.

What is an "In-Service" Rollover?

Unlike the "traditional" rollover, an "in-service" rollover is probably something you've never heard of, and for good reason. First, not all company retirement plans allow for it, and second, even for those that do, the details can be confusing to employees. The bottom line: An in-service rollover allows an employee (often at a specified age such as 55 or 59 ½) to be able to roll their 401k to an IRA while still employed with the company. The employee can also still contribute to the plan, even after the rollover is complete. Most plans allow this type of rollover once per year, but depending on the plan, you could potentially complete the rollover more often for different contribution types (ex., 'after-tax' contributions that you could possibly roll over to a Roth IRA for future tax-free growth).

Why Complete an "In-Service" Rollover?

More investment options: With any company retirement plan, you will be limited to the plan's investment options. By having the funds in an IRA, you can invest in just about any mutual fund, ETF, stock, bond, etc. Having access to more options can potentially improve investment performance, reduce volatility, and make your overall portfolio allocation more efficient. In my experience, most employer plans have decent options for stock funds but are very limited when it comes to bond options. This can become problematic as one gets closer to retirement and needs to position their portfolio more conservatively.

Coordination with your other assets: If you're working with a financial planner, they can coordinate an IRA into your overall plan far more efficiently than a 401k. How many times has your planner recommended changes in your 401k that simply don't get completed? (Tisk, tisk!) If your planner is managing the IRA for you, those recommended changes are going to get completed instead of falling off your personal "to-do" list.   

Additional flexibility: IRAs allow certain penalty-free withdrawals that aren't available in a 401k or other company retirement plans (certain medical expenses, higher education expenses, first-time homebuyer allowance, etc.). Although using an IRA for these expenses should be a last resort, it's nice to have the flexibility if needed.

Exploring "In-Service" Rollovers

So what now? The first thing is to always keep your financial planner in the loop when you retire or switch jobs to see if a rollover makes sense for your situation. In many cases, it might make more sense to keep your employer retirement plan as is. Factors such as cost of professional management, flexibility on distributions (ex., special age 55 penalty-free distribution rules), and possible increase of creditor protection should all be considered when determining if a rollover could be right for you and your long-term financial plan. Just like most things in financial planning, there is almost never a 'black and white' answer when it comes to rollovers. Ideally, you may want to consider working with a Certified Financial Planner when making this determination for you. CFPs must typically adhere to the ethics and standards conduct of the CFP® board by acting in your best interests.

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Article written by Nick Defenthaler, Partner, Financial Planner with Center for financial Planning, Inc. 24800 Denso Drive, Suite 300, Southfield, MI 48033, 248-948-7900. If you've changed jobs or are retiring, rolling over your retirement assets to an IRA can be an excellent solution. It is a non-taxable event when done properly - and gives you access to a wide range of investments and the convenience of having consolidated your savings in a single location. In addition, flexible beneficiary designations may allow for the continued tax-deferred investing of inherited IRA assets. In addition to rolling over your 401(k) to an IRA, there are other options. Here is a brief look at all your options. For additional information and what is suitable for your particular situation, please consult us. Leave money in your former employer's plan, if permitted. Pro: May like the investments offered in the plan and may not have a fee for leaving it in the plan. Not a taxable event. Roll over the assets to your new employer's plan, if one is available and it is permitted Pro: Keeping it all together and larger sum of money working for you, not a taxable event. Not all employer plans accept rollovers. Rollover to an IRA Pro: Likely more investment options, not a taxable event, consolidating accounts and locations: usually fee involved, potential termination fees. Cash out the account: Con: A taxable event, loss of investing potential. Costly for young individuals under 59 ½; there is a penalty of 10% in addition to income taxes. Be sure to consider all of your available options and the applicable fees and features of each option before moving your retirement assets. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Center for Financial Planning, Inc.®, is not a registered broker/dealer and is independent of Raymond James Financial Services. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax issues, these matters should be discussed with the appropriate professional. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James. Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Earnings withdrawn prior to 59 1/2 would be subject to income taxes. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

May Book Tour Recap: Big Conversations, Bold Insights, and What’s Coming Next

Contributed by: Jaclyn Jackson, CAP®

May was a moment. Our Finding Your Center book tour made its Brighton debut, and the conversations were as vibrant as the venue itself. Hosted at the stylish and welcoming All Heart Garage, each event brought together community members eager to learn, connect, and take real steps toward financial confidence.

At the heart of it all? A dynamic panel of experts who didn’t hold back. From debunking overpriced annuities that don’t align with your goals to smart takes on tax strategies in today’s shifting political landscape to thoughtful commentary on tariffs and their market ripple effects—there was something for everyone.

But it wasn’t just high-level thinking—it was practical, personal, and powerful. Attendees left with new insights, real tools they could use, and a renewed sense of purpose when it comes to building a secure and meaningful financial future.

Why You Should Join Us Next Time

Each guest received a free copy of our newly released book, Finding Your Center: Achieving Confidence Through Financial Planning—a resource that’s already sparking “a-ha” moments and empowering readers to take charge of their financial story.

This isn’t your average finance book. It’s filled with real-life tips, conversation starters for families, and strategies that actually make sense for today’s economy. Reading it is just the beginning—our events bring the pages to life.

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What’s Next: June and July—Mark Your Calendars!

📅 June Events

REGISTER HERE

We’re tailoring deep-dive sessions for executives, entrepreneurs, and high earners nearing retirement. If you’ve been wondering how to maximize your savings and minimize your tax bill, these events are designed with you in mind.

📅 July Events

REGISTRATION DETAILS COMING SOON

Our July series kicks off with a family-friendly financial literacy event that’s both fun and informative. Bring the grandkids! There’ll be interactive games, lunch, and a panel hosted by Brooke Allen, plus free books and activities led by Junior Achievement. Two powerful follow-up events will dive into chapters on legacy building, charitable giving, and smart college funding strategies—perfect for grandparents and parents alike.

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🎉 Come for the conversation. Leave with clarity.

We’d love to see you at one (or all!) of our upcoming events. Whether you’re planning for retirement, looking to support the next generation, or simply curious about how to make smarter financial decisions—this tour was built for you.

Your center is waiting.

Jaclyn Jackson, CAP® is the Director of Marketing at Center for Financial Planning, Inc.®

Any opinions are those of Jaclyn Jackson, CAP®, and not necessarily those of Raymond James.

Taking Charge of Your Financial Future: A Busy Professional's Guide

Contributed by: Kelsey Arvai, CFP®, MBA

Let’s face it: life moves fast. Back-to-back meetings, inbox and voicemail full, and trying to squeeze in a workout or some semblance of a social life. It’s no wonder financial planning often gets pushed to the bottom of the to-do list, especially for busy professionals.

Busy professionals understand that their financial future isn’t some far-off idea. They see in real-time how their future is being shaped right now with every decision they make, every dollar they spend, their job, their family, and several elements outside their control and purview.

Luckily, all you need is a plan and to stick to said plan.

This guide was created for the ambitious, over-extended, high-achieving professionals who want their money working as hard as they do.

1. Know Thy Numbers. Understand what matters and what doesn’t. What matters: your net worth, your savings rate, your monthly cash flow, and your progress toward your big-picture goals. With Financial Freedom as the goal, the way you get there is slowly over time. It’s decisions that compound (either upwards or downwards) that will set you in the direction you’re going.

2. Automate Often. Learn Your Plan. Automation is a busy professional’s bestie. Consider setting up auto-transfers for bills, savings, and everything in between. You might start with high-yield savings, even if it’s $50 bucks a paycheck—choose an amount that you will never have to stop saving until you have at least 3 to 6 months of spending in cash. It’s prudent to consider deferring at least up to the employer match (typically 4%) to your employer retirement plans (401k, 403b, etc.). Work your way up to saving 15-20% of your total household income, even if it’s by increasing your deferral by 1% each year until you max out your retirement plan. Utilize target date funds based on your age 65, set it, and then forget it. Understand your benefits you want to understand how your money is being allocated.

3. Taxes Are Cool! Tax planning is a year-round adventure. Every financial decision we make has some tax implication (for better or worse). Tax strategies can impact the longevity of your plan and help to ensure that your money lasts as long as you do or increase your probability of accomplishing your legacy goals.

4. Protect Yourself. The root of your plan should be defined by what you feel is success—whatever that looks like to you. Ensure you have appropriate insurance coverage to protect against unexpected losses. Regularly review and update policies as your circumstances change.

5. DIY Only Sometimes. There is power in delegation. Hiring a financial planner to create a personalized strategy for you and keep you accountable. More importantly, we are here through every change, expected or unexpected.

Financial Planning is not about perfection; it’s about intention. So, take pause often and ensure you are heading in the direction that YOU want to go. And if not, take the steps to course-correct with courage, clarity and probably a spreadsheet or two.

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Enjoyed this blog? Boost your financial confidence with our book, Finding Your Center: Achieving Confidence Through Financial Planning. Click HERE to learn more and get your copy.

If you're in the Metro Detroit area, join our book tour and receive a FREE copy!

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Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA, CFP®, and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through the Center for Financial Planning, Inc. The Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

401(k) and 403(b) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.

Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.

"Staying the Course" Isn’t a Snooze Button

Contributed by: Mallory Hunt

"The key to making money in stocks is not to get scared out of them." – Peter Lynch

When it comes to investing, the phrase "stay the course" is practically gospel. It's repeated in market downturns, shared in financial blogs (this may currently resonate…), and printed on motivational coffee mugs. And rightly so—emotional decisions are one of the biggest threats to long-term investment success. While staying the course is a powerful mindset for long-term investors, it can often be seen as a call for inaction, and you very well may be sick of hearing the phrase, but it's not inaccurate. Just like a plane on autopilot still needs a pilot in the cockpit, your portfolio still needs your eyes—just not your panic.

Staying the Course ≠ Doing Nothing Forever

Yes, staying invested during market volatility is usually the right move, but does that mean your investments should go untouched for decades? Of course not. Your financial life isn't static, nor is the world around you. Life changes. Goals shift. The markets evolve. And your investment strategy needs to reflect that. Think of your portfolio as a garden. Staying the course means letting your plants grow, not digging them up every time a storm rolls in. BUT it doesn't mean ignoring weeds, forgetting water, or never pruning. Good gardeners check in regularly—so should good investors.

This chart below, created by my colleague, Nick Boguth, effectively illustrates the undeniable relationship between risk and return. While drawdowns can be unsettling, we are here to provide guidance and support during these uncertain periods. However, it is important to notice that significant periods of volatility are often followed by substantial growth. The blue line below signifies how markets have continued to grow despite volatility and drawdowns (orange line). While those drawdowns can be deep and painful to live through in the moment, you can see that they tend to be only temporary

What Staying the Course Really Means

It means sticking to a well-thought-out plan, not ignoring it altogether. It means:

• Rebalancing regularly – Markets move, and over time, your portfolio drifts from its original allocation. Rebalancing brings it back in line with your risk tolerance and goals. Luckily, we are already doing this for you! We review accounts frequently throughout the year and rebalance when they deviate from your set goals.

• Reviewing goals and timelines – Are you still saving for that early retirement? Has your timeline changed? Are you nearing a big purchase? Your investments should reflect those life updates. Guess what? We do this for you, too! These items are usually discussed during your Annual Review Meetings with your planner.

• Avoiding emotional reactions – This one remains true. Don't let headlines or temporary downturns dictate your moves. We know this can be difficult, but again, staying calm isn't the same as being passive. We are always available to answer any questions that you may have.

The Bottom Line

Staying the course is about consistency, not complacency. The most successful investors stay engaged, review their plans periodically, and always keep the big picture in mind. So no, you don't need to micromanage your portfolio every week, but it shouldn't be stashed away or forgotten. Check in, stay informed, and above all else, trust the process.

Mallory Hunt is a Portfolio Administrator at Center for Financial Planning, Inc.® She holds her Series 7, 63 and 65 Securities Licenses along with her Life, Accident & Health and Variable Annuities licenses.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Mallory Hunt and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

How Much is Enough? Calculating Your Retirement Savings Goal

Contributed by: Josh Bitel, CFP®

Retirement may seem far off, but knowing how much you need to save is a crucial first step toward financial security. The answer to "How much is enough?" isn't one-size-fits-all—it depends on your lifestyle expectations, health, location, and longevity. However, there are some "rules of thumb" that can help you put a pulse check on your retirement plan:

Start with the 80% Rule

A common rule is that you'll need about 70% to 80% of your pre-retirement income to maintain your lifestyle in retirement. For example, if you currently earn $100,000 annually, plan on needing around $70,000–$80,000 per year after you stop working. This accounts for lower expenses—such as commuting, work clothing, or mortgage payments—but you may spend more on healthcare or travel.

Use the 25x Rule

Once you have your annual income target, multiply it by 25 to estimate your total retirement savings goal. If you need $70,000 a year, that means you should aim for $1.75 million. This rule is based on the 4% withdrawal strategy, which assumes you can withdraw 4% of your retirement savings annually without running out of money for at least 30 years, a popular strategy for estimating the strength of a financial plan.

Factor in Other Income Sources

Remember to account for other income sources like Social Security, pensions, or rental income. If Social Security is expected to provide $20,000 a year, and you need $70,000, then your savings only need to cover the $50,000 gap—meaning a goal closer to $1.25 million instead of $1.75 million.

Adjust for Inflation and Healthcare Costs

Healthcare expenses tend to rise with age, and inflation steadily erodes purchasing power. It's wise to build a cushion by overestimating your needs rather than falling short. Consider using retirement calculators or working with a financial advisor to model different scenarios.

Start Early, Save Consistently

The earlier you begin saving, the more time your investments have to grow through compound interest. Even modest contributions can grow significantly over time. Don't worry though, it is never too late to get started! If you start later, increasing your savings rate or delaying retirement by a few years can make a big difference.

Ultimately, your retirement goal should reflect your unique vision for the future. Take time to define that vision, crunch the numbers, and revisit your plan regularly. Your future self will thank you. And, of course, don't hesitate to seek advice from a financial planner if you are curious about your retirement path.

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Enjoyed this blog? Boost your financial confidence with our book, Finding Your Center: Achieving Confidence Through Financial Planning. Click HERE to learn more and get your copy.

If you're in the Metro Detroit area, join our book tour and receive a FREE copy!

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Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Josh Bitel, CFP® and not necessarily those of Raymond James.

Investing involves risk and investors may incur a profit or a loss regardless of strategy selected, including asset allocation and diversification.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc®. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Why Insurance Matters – And Why It Starts with You

Contributed by: Kelsey Arvai, CFP®, MBA

Life is unpredictable. While we can't foresee every twist and turn, we can prepare for what may lie ahead to help protect ourselves, our family, and our stuff. Insurance often serves as a crucial tool in this preparation, offering a safety net against unforeseen events. Before caring for loved ones, protecting your home, or building a legacy, you must take care of yourself because you are your most valuable asset.

Building wealth starts with taking care of your health. Medical costs remain the #1 cause of bankruptcy in the US, and rising medical expenses can feel overwhelming. Health insurance helps mitigate these costs, making healthcare more accessible and affordable. Even when health insurance does not seem worth the investment, it is hands down the most important one you will make over your lifetime. Being reactive with your health is often far more expensive, both financially and emotionally, than taking a proactive approach. Skipping annual check-ups, preventative screenings, or delaying addressing symptoms makes you susceptible to negative compounding effects on your overall financial well-being and future. The risk is clear—turning small, manageable health issues into major financial burdens. Without health coverage, the average cost of a three-day hospital stay in the US is over $30,000, not to mention the toll a hospital visit takes on other areas of your life. Health insurance isn't just about avoiding enormous costs; it's centered around making you the best and healthiest version of yourself. Building your financial plan around sustainable self-care is one of the most meaningful decisions you can make.

In essence, insurance is about risk management. It's a proactive approach to protect yourself and your loved ones from potential financial hardships. Disability insurance is often overlooked, yet it remains among the most critical insurance coverage, along with health and life insurance. Each is designed to ensure that you or your loved ones are provided for in the worst-case scenarios. Disability insurance provides financial support if you cannot work due to illness or injury, allowing you and your family to maintain your standard of living, despite challenging times. Regularly reviewing your insurance coverage, goals, and needs remains at the core of your financial strategy to ensure alignment.

Now that you and your loved ones are protected, we now turn our attention to your stuff and lifestyle. Stuff is everything from your home, car, vintage teacup collection, clothes, and personal belongings. When it comes to protecting your lifestyle and property, auto and homeowners' insurance/rental insurance are foundational—but the details matter. For our clients in Michigan and other no-fault states, please understand the importance of unlimited Personal Liability Protection (PIP) coverage. While recent legislation allows for lower coverage options, unlimited PIP remains the gold standard for safeguarding against catastrophic medical expenses following an accident—especially when considering lifelong care costs.

Whether you are a homeowner or renting, policy insurance requires intentional customization. Renters insurance is often overlooked, but it is an affordable way to protect your personal belongings and provide liability coverage if someone is injured in your rental—coverage your landlord's policy doesn't include. Standard policies often limit coverage on high-value items like fine art, wine, or other collectibles. To fully protect these, you'll need to itemize and schedule them separately, which may require formal appraisals and updated valuations every few years. Whether in Michigan or elsewhere, ensuring your policy reflects the full value of your lifestyle—not just your home or apartment's square footage—is a key part of holistic planning.

Umbrella insurance provides an extra layer of liability protection beyond your auto and homeowners/renters policies—offering you reassurance if you're ever involved in a major lawsuit. If you have significant assets, host guests frequently, or have young drivers in your household, consider implementing a policy. Property & Casualty insurance (auto, renters, umbrella, and homeowners) helps safeguard you, your family, and your stuff by ensuring your quality of life is not disrupted by unexpected damage or losses.

Lastly, let's discuss legacy and LTC coverage. According to the US Department of Health and Human Services, someone turning 65 today has nearly a 70% chance of needing some form of long-term care (LTC) services at the end of their life. Yet, it is very difficult and expensive to plan for. We often don't associate LTC with the legacy we hope to leave, but the two are deeply connected. Without a plan in place—whether through traditional LTC, a hybrid life/LTC policy, or a dedicated self-funding strategy—we leave ourselves vulnerable to preserving your financial legacy and easing the burden of your loved ones. Additionally, life insurance intended to cover legacy purposes offers comfort that your loved ones will be financially supported in the event of your passing. It can help cover funeral expenses and outstanding debts and provide ongoing income to your family.

The insurance hierarchy in your plan should reflect your values. Start by protecting yourself and your health, then protect your income and loved ones, your lifestyle and stuff, and finally, your legacy. Insurance isn't about fear—it's about caring deeply for the life you're building. Review your insurance coverage at least annually to identify if there are any gaps in your insurance coverage and assess where you are now. If there are gaps, strategize and implement coverage to ensure you are where you want to be.

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Enjoyed this blog? Boost your financial confidence with our book, Finding Your Center: Achieving Confidence Through Financial Planning. Click HERE to learn more and get your copy.

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Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Kelsey Arvai, MBA, CFP® and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

The Importance of Reviewing Account Beneficiaries and Account Titling Annually in Your Estate Plan

Contributed by: Sandra Adams, CFP®

When most clients think about their estate planning, they think about the actual drafting of the documents — their Wills, Durable Powers of Attorney, maybe their Trust. While the documents themselves are crucial components of a comprehensive plan, one often-overlooked step is the annual review of account beneficiaries and account titling to make sure they are consistent with the estate documents. Together, these two parts of the plan can significantly impact how your assets are distributed after you pass away, so it is vital to ensure they align with your overall estate planning goals.

Why Review Beneficiaries?

Beneficiary designations on accounts such as retirement plans, life insurance policies, individual investment accounts (Transfer On Death designations), and bank accounts (Payable On Death designations) supersede what is written in your will. This means that if your beneficiary information is outdated, your assets could go to someone you no longer intend to receive your assets or even unintentionally create tax liabilities or complications for your loved ones.

For instance, you might have named your ex-spouse as a beneficiary years ago. If you have forgotten to update your beneficiary designation, this could lead to a distribution that contradicts your current wishes (unless, of course, you still wish to leave money to your ex-spouse!). Annual reviews of these designations ensure that beneficiaries reflect your present intentions and changing life circumstances — whether it is marriage, the birth of a child, or the passing of a loved one.

The Role of Account Titling

Equally important is ensuring your account titling is consistent with your estate planning goals. Joint accounts, for example, can pass directly to the surviving account holder, potentially bypassing your will’s instructions. If your accounts are titled improperly, your assets may not flow according to your plan, leading to unintended tax consequences or family disputes.

By reviewing your account titling annually, you can confirm that your assets are positioned in the most effective way to meet your estate planning goals and minimize the risk of probate court or conflict.

Work with your financial planner to make sure regular reviews of both beneficiaries and account titling are a part of your annual estate planning review process to give you peace of mind and ensure your wishes are honored when the time comes. If you or someone you know needs assistance with an estate planning review, feel free to reach out — we are always happy to help. Sandy.Adams@CenterFinPlan.com

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Enjoyed this blog? Boost your financial confidence with our book, Finding Your Center: Achieving Confidence Through Financial Planning. Click HERE to learn more and get your copy.

If you're in the Metro Detroit area, join our book tour and receive a FREE copy!

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Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandy Adams, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

The Power of Working Longer

Contributed by: Nick Defenthaler, CFP®, RICP®

Saving 1% more towards retirement for the final 10 years of one’s career has the same impact as working one month longer. Yes, you heard that correctly. Saving 15% in your 401k instead of 14% for the 10 years leading up to retirement has the same impact as delaying retirement by only 30 days! Hard to believe but that’s exactly what the National Bureau of Economic Research found in their 2018 research paper titled “The Power of Working Longer”. To make your eyes pop even more, saving 1% more for 30 years was shown to have the same impact as working 3-4 months longer. Wow!

If you’re like me, you find these statistics absolutely incredible. This clearly highlights how big of an impact working longer has on your retirement plan. When you’re getting very close to retirement (usually 5 years or less), most of us won’t be able to make a meaningful impact to our 25-35 year retirement horizon by increasing our savings rate.  At this point in our careers, it just doesn’t move the needle the way you might think it would.  Without question, the best way you can increase the probability of success for your retirement income strategy in the latter stages of your career is to work longer. But when I say “working longer”, I don’t necessarily mean working longer on a full-time basis. 

A trend I am seeing more and more of that excites me is a concept known as “phased retirement”. This essentially means that you’re easing into retirement and not going from working full-time to quitting work cold turkey. We as humans tend to view retirement as “all on” or “all off”. That’s the wrong approach if you ask me. We need to be thinking of part-time employment as part of your overall retirement/financial game plan.  

Let’s look at this case study about Diane:

Diane, age 61 came in for her annual planning meeting and shared that the stress of her well-paying sales position was completely wearing her down. At this stage in her life and career, she no longer had the energy for the 50 hour work weeks and frequent travel. Now a grandmother of 3, she wanted to spend more time with her kids and grandkids but was fearful of how retiring at 61 compared to our plan of 65 would impact her long-term financial picture.  After further conversations, it became evident that Diane did not want to stop working completely; she just could not take the full-time grind anymore. When the pen was put to paper, it was concluded that she could still achieve her desired retirement income goal by working part-time for the next 3 ½  years (until 65 to get her to Medicare age).  Her income level would be dropping to a level that would not allow her to save for retirement at all, but believe it or not, that did not have a meaningful impact on her long-term plan! Earning enough money to cover virtually all of her living expenses and dramatically reducing portfolio distributions until age 65, however, was the key factor. 

Having conversations surrounding your desired retirement age is obviously a critical component to your overall planning.  However, a question that is sometimes overlooked that I like to pose is, “WHY do you want to retire at that age?”.  As a society, we do a good job of creating social norms in many aspects of life, and retirement is not immune to this.  I’ve actually heard several clients respond to this question and say, “Because that’s the age you’re supposed to retire!”.  When I hear this, I get nervous because these are the folks who usually make it 6 months into the retirement transition only to find that they are not truly happy. They found purpose in their career, they enjoyed the social aspects their job offered and they loved keeping busy, whether they realized it at the time or not. 

The bottom line is this – don’t discount the effectiveness easing into full retirement can have, both from a financial and lifestyle standpoint. Some clients have found a great deal of happiness during this stage of life by working less, trying a different career or even starting a small business they’ve been thinking about for years. The possibilities are endless.  Have an open mind and find the balance that works for you, that’s what it’s all about. 

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Enjoyed this blog? Boost your financial confidence with our book, Finding Your Center: Achieving Confidence Through Financial Planning. Click HERE to learn more and get your copy.

If you're in the Metro Detroit area, join our book tour and receive a FREE copy!

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Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Center for Financial Planning, inc. is not a registered broker/dealer and is independent of Raymond James Financial Services. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax issues, these matters should be discussed with the appropriate professional. This case study is for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James.