Creating a comprehensive financial plan, preparing for life changes and keeping abreast of different ways to distribute wealth are among the top priorities to consider when nearing retirement.
Reaching middle age brings two of life’s most joyful experiences: grandchildren and retirement. However, the passing years also increase the probability of life-disrupting surprises, like a dependent elderly parent or health crisis.
These challenges don’t have to adversely affect a person’s long-term financial health. “We’re big believers in understanding where clients are in life and helping them align their assets with their values to achieve their financial goals,” said Stephanie Harris ’96, who co-owns the S. Harris Financial Group in San Antonio with her husband and business partner, Scott ’95. Honored in Forbes’ list of America’s Top Women Wealth Advisors from 2020 through 2023, she shared five financial considerations to keep top of mind as retirement nears.
1. Create a comprehensive financial plan.
A comprehensive plan that includes current and projected savings and spending rates offers a road map to financial security. “Having a comprehensive financial plan gives you greater peace of mind as you undergo transitions,” Harris said. “We regularly meet with clients and ask for updates on their finances as well as changes to their health and family because these changes can impact a financial situation. With more knowledge, you can adjust your financial picture as needed.”
2. Take the long view.
Older adults should maintain a balanced portfolio with an eye on the long term. “Someone retiring at age 60 to 65 may actually live longer in their retirement years than their working years,” Harris explained, adding that it’s important to remain invested in the stock market to stay ahead of inflation. “Even if you’re 60, the money you’re investing in the stock market isn’t typically the money you’ll need in the next five years. It’s to protect the dollars you’ll need in your 80s or 90s.”
3. Prepare for life changes.
An older adult’s life trajectory can rapidly change based on a health diagnosis. Therefore, people in their 50s need to start planning for long-term care needs not included in standard health insurance. Harris recommends considering long-term care insurance, which could help cover the expense of hiring assistance with daily living activities (such as bathing, dressing, etc.) that are often part of the aging process. She encourages investigating this type of policy earlier rather than later since most underwriters will not approve a policy when there is a diagnosis of certain age-related health issues.
4. Continue to track savings and spending.
Older adults must continually assess their savings and spending rates as they age to ensure their finances still align with their values and goals. This approach (which only requires paper and pencil or electronic tools and apps) can help individuals identify small costs—like daily Starbucks trips—that quickly add up and can become a surprisingly large percentage of a person’s monthly expenditure. “If you’re tracking your spending, you can focus on trimming an expense if a category surprises you,” she said.
5. Keep tabs on changing ways to distribute wealth.
Unless new legislation is passed, changing tax laws will likely increase the amount of income and estate taxes you pay beginning in 2026. Because of this, Harris encourages high-net-worth adults to evaluate making a financial gift to heirs before 2025. In addition, a tax law passed in 2019 now requires non-spouse heirs to distribute funds from inherited IRAs over a 10-year time period after death. Since this could put the beneficiary in a higher tax bracket, she suggests considering a gift to a nonprofit such as the Texas A&M Foundation to reduce taxes.
Stephanie Harris ’96 (left) co-owns the S. Harris Financial Group with her husband and business partner, Scott ’95. Together, they help clients create financial plans that mirror their life goals.
Finally, charitable giving options shift later in life. People over 70.5 years old can tap their retirement plan to make a tax-free qualified charitable distribution of up to $100,000 each year to their favorite charitable organization.
The Harrises’ own long-term financial plan includes an after-lifetime gift to the Texas A&M Foundation for Texas A&M University that will create two scholarships, an excellence endowment in financial planning and an Aggie Ring endowment. “After the 2019 change to the tax law eliminating the ability to stretch distributions from retirement accounts to non-spouse heirs over their lifetime, we revised our documents and contingent beneficiary designations to leave our IRA accounts to the Foundation,” Harris said. “This gives us the greatest tax efficiency in our overall estate plan and ensures that we leave a legacy to support the university we love.”
This article is intended to share general information on financial planning. Readers should seek professional guidance to better understand the best plan for their individual needs.
Interested in making a charitable gift for Texas A&M University part of your retirement plan? Get started by downloading our free estate planning kit below or contact Kevin Westerman ’11, assistant vice president for planned giving, at the bottom of this page.
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