5 Retirement Decisions You Can’t Reverse — and Why a Fiduciary Should Review Them First

Sponsored. If you have $100,000 or more saved, some retirement choices are permanent. That’s why a fiduciary’s second opinion matters before you commit.

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I’ve worked as a CPA since 1981, and I’ve seen plenty of disciplined people build meaningful retirement savings on their own. Saving is the first step. The next stage is different.

From your mid-50s through age 70, you’ll face several decisions you may not be able to undo. If you claim Social Security at 62 instead of 67, your monthly benefit is about 30% smaller for life. Even the timing of retirement is less under your control than it may seem: in EBRI’s Retirement Confidence Survey, nearly half of retirees said they stopped working earlier than planned.

Once you have $100,000 or more saved or invested, it can be worthwhile to have a fiduciary take a second look. A fiduciary is an advisor who is legally required to act in your best interest. Here’s why that matters.

Short on time? See which fiduciary advisors match your situation (for people with $100,000 or more saved or invested)

1. Decisions that can’t be reversed deserve a second opinion

Some retirement choices are effectively permanent. You can sell a fund and buy it back later, but you can’t undo an early Social Security claim.

With full retirement age at 67, filing at 62 reduces the benefit by about 30%. Delaying beyond 67 increases the benefit by roughly 8% per year until age 70. Pension payout elections, 401(k) rollovers and the date you retire can carry similar long-term consequences.

SEC staff have said an adviser recommending a rollover should consider whether leaving money in an employer plan is the better option. That is the kind of review a fiduciary should provide before you sign anything. The final choice remains yours.

2. An early market drop can do the most damage

The same downturn hurts more when you’re already withdrawing money. No one can predict the next weak year. But if the market falls in the first few years of retirement, the damage can be harder to recover from than if it happens later. You may need to sell investments to cover living expenses while prices are down, leaving less behind to rebound.

Planners call this sequence-of-returns risk. Preparing for it means deciding how much investment risk to keep once your paycheck stops, how much cash to hold and how flexible your spending can be in a down year. A fiduciary can help you make those decisions in advance instead of under pressure. No one can guarantee a downturn won’t happen, but a plan tells you what to do if it does.

Get a second look before your first withdrawal. Advisor.com matches you with fiduciary financial advisors based on your goals and situation. It is designed for people with $100,000 or more saved or invested, and you decide whether to meet anyone.

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3. The order of withdrawals affects your taxes

Which account you tap first can change how much goes to taxes. Taking too much from pre-tax accounts in a single year can push you into a higher bracket. Waiting too long can also create problems, since required minimum distributions, which begin at 73 under current IRS rules, may force larger taxable withdrawals later.

As a CPA, this is where I’ve seen many avoidable errors. Withdrawal order, Roth conversions and your Social Security claiming age all affect one another. A fiduciary looks at the full picture rather than treating each year as separate.

Want someone to review all your accounts together? Find My Fiduciary Advisor

4. A fiduciary must put your interests first, and you can verify it

Not every financial advisor is a fiduciary. Registered investment advisers owe clients a duty of care, which means advice must be in the client’s best interest. They also owe a duty of loyalty, which requires them to eliminate or fully disclose conflicts of interest.

Ask any advisor three questions:

1. Are you a fiduciary at all times, for all my accounts?
2. How are you paid?
3. Will you put both answers in writing?

Then check them for free at adviserinfo.sec.gov, the SEC database that shows registration details and any disciplinary history. Advisor.com only refers people to fiduciary advisors, but it is smart to verify anyone who handles your money.

5. Make sure someone your spouse can reach knows the plan

Your plan should still work if you are not the one managing it. In many households, one person handles the finances. If something happened to you, would your spouse know where every account is, what the plan calls for and who to contact?

An advisor who already understands your accounts and goals can provide that continuity. A planning meeting is also a good time for both partners to see the full picture together.

Is this for you?

• You have $100,000 or more saved or invested.
• You are within about 10 years of retirement, or recently retired.
• You’ve managed your finances yourself and want a second look before making major decisions.

Find a fiduciary who fits your situation

• Matches you only with fiduciary advisors, legally required to act in your best interest

The Bottom Line

You’ve already done the hard part. Now comes a stretch of choices that can shape your income for life, and several of them can’t be reversed. Choosing the wrong age to claim Social Security alone can leave you with a check about 30% smaller forever.

People who handle this stage well make decisions before they are forced to. They know their claiming age, their withdrawal order and their plan for a market downturn before the first withdrawal. A fiduciary’s second look is a simple way to get there. It takes about 10 minutes and a conversation, and every decision remains yours.

For people with $100,000 or more saved or invested.