Retirement Conundrum: I've saved, I've retired, but now what?

Congratulations! You made it to retirement. Now you can relax and enjoy life. No more punching a time clock. No more senseless meetings where everyone is multi-tasking and not paying a bit of attention to you. Your hard-earned retirement income is on the way.

Ahhhh yes-family, faith, exercise, travels, reading, cooking, learning a new language, the possibilities are endless.

But can you really relax?

Hopefully, you have been planning this day for years. Sadly, most Americans spend more time planning their family vacation than they do planning for retirement. So if your journey through retirement might need some updated maps, here are some simple thoughts to consider.

- First, understand that you now have competing goals with which to manage your portfolio. Your goal to maintain your level of spending can be in conflict with your goal to preserve (in real terms) and grow your nest egg at a rate needed for your life expectancy. My experience has shown that this requires a lot of thought and coaching. There are generally three approaches used by advisors to help you manage your savings when considering these goals. The first is to determine a certain dollar amount that you will need and structure a risk adjusted portfolio to meet that cash flow from either insurance, dividends or interest payments. The second is to apply a percentage of the total portfolio calculation to determine how much cash flow you will receive. This total return type of strategy utilizes both income and principal to generate cash flow. The third approach is kinda like the second one, but puts limits on cash flow distributions so as to minimize the fluctuations in asset prices.

- Next, understand that the single largest impact to your wealth over time will be your tax expenses. Over time, taxes have a bigger impact than housing and healthcare combined. So with retirees owning multiple account types (investment accounts, pensions, IRAs, Roth IRAs, annuities, etc.) with multiple registrations (owners) and multiple income sources, the critical question is where you take your income from (location)? An Ernst & Young analysis showed that by coordinating "location", much better after-tax returns and retirement income to investors was produced. Similarly, a study by Morningstar found that focusing on "location" generated more than 1 percent per year in additional return.

The good news is that technology continues to improve arming either you or your advisor with tools to help make these types of decisions. According to a PwC report, there are powerful forces continuing to shape and drive technological innovation.

For example, demographic changes with the millions of Baby Boomers who are living longer lives; the inter-generational wealth transfers that are occurring; the growing cultural diversity which effects marketing strategies to serve more diverse markets; changing investor behaviors; technological innovations from smart phones to the cloud; and even newer participants with even more disruptive technology.

And if you have not thought about it before, review what role you want to play during your retirement journey. Do you want to fully delegate these decisions to a trusted advisor? Do you just want to assist? Or do you want to do it all on your own using technology?

In all cases, please make sure that you know "total costs." To be clear, there is nothing wrong with fees. However, it has always been a surprise to me that retirees do not know how much they are paying for advice. You should demand transparency and know. You should also know the difference between an advisor acting in a fiduciary capacity versus one who operates under suitability guidelines. I remain convinced that in either case, your advisor's most important role is to serve as your coach! Remember, as great as Peyton Manning was, even he had coaches.

So again to new retirees, congratulations! Enjoy your life but remember to determine your role; develop, implement and annually review your plan; focus on location; and demand trust, transparency and accountability. Happy travels.

Andy Muldoon is a senior vice president in Chattanooga for The Trust Company

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