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Planning for retirement is both exciting and complex, especially if you’re settling in Georgetown, TX – a city often recognized as one of the best retirement spots in the U.S. Georgetown offers warm Hill Country scenery and a thriving retiree community. With a charming small-town feel just north of Austin, it’s no surprise many pre-retirees are drawn here. But a successful retirement requires careful planning that covers everything from Social Security and Medicare to tax strategies and estate planning, all while factoring in local realities like Texas property taxes and cost of living.
Key components of a comprehensive retirement plan include:
In this article, we’ll try to explore each of these elements in an informative way. You’ll see how general retirement planning principles apply, plus specific local insights for Georgetown residents – from property tax breaks for seniors to the vibrant 55+ communities in the area. By the end, you’ll understand not only the basics of retirement planning, but also how working with a local financial advisor can add value in tailoring a plan to your personal goals and local conditions.
Deciding when and how to claim Social Security is one of the most important retirement decisions. Your monthly benefit can vary widely depending on the age you start taking it. You’re first eligible at age 62, but claiming that early comes with a significant reduction in benefits. Wait until Full Retirement Age (FRA) (around 66–67, depending on your birth year) and you’ll receive 100% of your earned benefit. If you delay beyond FRA, your benefit grows each year.
However, the “best” claiming strategy isn’t one-size-fits-all. It depends on your health, life expectancy, need for income, and whether you have other assets or income streams. For example, if you have longevity in your family (expect to live into your 90s) and can afford to live on savings in your early 60s, delaying Social Security to age 70 often maximizes lifetime benefits. On the other hand, if you need the income sooner or have health issues, claiming earlier might make sense.
One more critical point: Medicare enrollment is tied to your Social Security timing. Even if you plan to delay Social Security past 65, be sure to enroll in Medicare on time. Sign up for Medicare at age 65 (during your initial 7-month enrollment window) unless you have qualifying employer coverage, because delaying Medicare can trigger late enrollment penalties and coverage gaps. We’ll discuss Medicare more next – just remember that Social Security and Medicare decisions often go hand in hand.
Healthcare is a top concern in retirement, and Medicare is how most Americans 65+ get health coverage. Planning for Medicare involves understanding when to enroll, what coverage options to choose, and how Medicare works with your providers and budget. In Georgetown, retirees benefit from access to excellent medical facilities – St. David’s Georgetown Hospital, Baylor Scott & White clinics, and Seton Medical Center Williamson in Round Rock are all in the vicinity, providing quality care for seniors. Ensuring you have the right Medicare coverage will help you take full advantage of these resources without unnecessary out-of-pocket costs.
Enroll on time: Your Initial Enrollment Period (IEP) for Medicare starts 3 months before the month you turn 65 and ends 3 months after that month. Missing this window can lead to penalties.
If you’re relocating to Georgetown from out of state, be sure to update your Medicare plan if necessary. Medigap policies and Advantage plans are state- and region-specific. You’ll want coverage that includes the doctors and hospitals you intend to use locally. Texas has a wide selection of plans, and a local advisor or insurance specialist can help you compare which plan covers your medications best, or which Medicare Advantage plan might suit your needs.
One of the best parts about retiring in Georgetown is the friendly tax environment for retirees. Texas is one of a handful of states with no state income tax – and yes - this means even your retirement income. In fact, Texas doesn’t tax individual income at all, so Social Security benefits and withdrawals from 401(k)s/IRAs are tax-free at the state level. This is a huge advantage that can save Texas retirees thousands of dollars per year compared to states that tax retirement income.
However, “tax planning” isn’t off the table – it just shifts focus. You’ll still want to manage federal taxes on certain income. For example, traditional IRA or 401(k) withdrawals are taxable federally as ordinary income, and depending on your income level, up to 85% of your Social Security benefits could be subject to federal tax. Smart strategies like Roth conversions (gradually converting some IRA money to Roth IRA to lock in today’s tax rates) or timing your withdrawals to stay in a lower tax bracket can help reduce lifetime taxes. Additionally, recent retirees often experience a gap between retirement and when required minimum distributions (RMDs) kick in – those years can be great for tax planning (e.g. doing conversions or harvesting capital gains at a low tax rate).
Property taxes: Since Texas forgoes income tax, it leans more on property taxes to fund local services. Homeowners in Georgetown should budget for relatively high property taxes. The actual rate in Williamson County may differ, but many retirees here own homes and thus face substantial annual tax bills. The good news is Texas offers property tax relief for seniors. Once you reach age 65, you can apply for an Over-65 homestead exemption on your primary residence that significantly lowers your home’s taxable value for school district taxes and certain other taxescommunityimpact.com.
In your overall plan, consider long-term tax implications: for instance, Required Minimum Distributions (RMDs) from traditional retirement accounts now start at age 73 (for those born 1951-1959) and will move to 75 for younger folks. RMDs can potentially push you into a higher tax bracket in your 70s, so strategize in your 60s – maybe by drawing down some pre-tax funds earlier or converting to Roth – to smooth out taxable income.
Once you’re retired and no longer earning a paycheck, the focus shifts to drawing down your savings in a sustainable way. Crafting a smart withdrawal strategy means determining when and how to tap into your 401(k)s, IRAs, Roth accounts, and other investments so that your nest egg lasts for the rest of your life. The challenge is to provide yourself a steady income while not running out of money – and doing so in a tax-efficient manner.
A common starting point is the “4% rule,” a guideline that suggests withdrawing about 4% of your retirement portfolio in the first year of retirement and then adjusting that dollar amount for inflation each year thereafter. This approach was designed to make a portfolio last roughly 30 yearsinvestopedia.com. For example, if you have $1 million saved, 4% would allow $40,000 of withdrawals in year one. In year two, if inflation was 3%, you’d take $41,200, and so on. The 4% rule aims to provide a steady income stream without depleting the principal too quickly. It’s a useful rule of thumb, but it’s not foolproof or right for everyone.
Required Minimum Distributions (RMDs) will eventually factor into your withdrawal plan. As mentioned, currently the IRS forces you to start taking RMDs from traditional IRAs/401(k)s at age 73 (if you turned 72 after 2022). These required withdrawals are taxable and can be quite large if you’ve saved a lot. An advisor can help coordinate your discretionary withdrawals in your 60s with the mandatory ones later on. Sometimes it makes sense to draw more from tax-deferred accounts in your early retirement (even if you don’t “need” to) to reduce the balances and thereby reduce future RMDs and tax hits.
Also, decide which accounts to tap first. Often, a tax-efficient order is: spend down taxable investment accounts (cash out some stocks or funds – paying only capital gains tax) before touching tax-deferred accounts. Letting your 401(k)/IRA grow tax-deferred a bit longer can be beneficial, and if you’re in a lower tax bracket early in retirement, converting some of that IRA to a Roth (paying tax now) might save taxes later. Roth IRAs, on the other hand, have no RMDs and grow tax-free, so many people leave Roth funds for last (or even as an inheritance) since they aren’t forcing taxable income. The right sequence for you will depend on your balances in each account type, tax rates, and your estate planning goals.
Ultimately, a sound withdrawal strategy will be personalized. It should take into account your lifestyle needs (e.g. higher spending in early retirement for travel, then maybe leveling off), the age at which you start Social Security (which provides a baseline income), and contingency plans for big expenses (like a new roof on the house or healthcare episodes).
Retirement often calls for a shift in investment strategy. During your working years, you may have invested aggressively for growth. Now, as you enter retirement, the goals for your investment portfolio typically broaden to include capital preservation and income generation in addition to continued growth. It’s essential to align your portfolio with your new reality: you’ll be withdrawing from it for income, so you need the right balance of stability and growth.
Reassess your risk tolerance: Can you still sleep at night if the stock market drops 20%? If you’re now relying on your investments to pay the bills, large swings can be unsettling. Most retirees dial down their stock exposure compared to when they were younger. You don’t have to eliminate stocks entirely (far from it – you still need growth to outpace inflation over what could be a 20-30 year retirement), but finding the right mix is key.
It’s a balancing act: too much in stocks could mean big losses at the wrong time; too little in stocks could mean your portfolio doesn’t grow enough to support a long retirement. The right balance depends on your personal goals, time horizon, and comfort level with risk. And remember, it’s not a set-it-and-forget-it situation – you should rebalance your portfolio periodically (at least once a year) to maintain your target allocations, and adjust over time as needed.
In short, transitioning into retirement is the perfect time to review and possibly reposition your investments. Aim for a well-diversified portfolio that reflects your need for income and stability, but also keep an eye on growth to protect against inflation.
Planning for the distribution of your estate and the management of your affairs as you age is a vital component of retirement planning. Estate planning is all about making sure your wishes are honored and your loved ones are taken care of in the future. In Texas – which is a community property state – and particularly in a retirement-rich community like Georgetown, proper estate planning can also smooth the way for your heirs and potentially save money on taxes and legal costs.
Key estate planning documents every retiree should have in order include:
A Will: This legal document spells out who inherits your property and assets when you pass away. If you die without a will in Texas, state law will determine who gets what, which might not align with your wishes. Ensure your will names an executor (someone you trust to carry out your wishes) and is updated to reflect your current situation (especially if you’ve moved from another state – you’ll want your will to comply with Texas law).
Durable Power of Attorney: This appoints someone to handle your financial affairs if you become incapacitated. For instance, if you have a stroke and can’t manage bills, the person you named as your power of attorney can step in and pay bills, manage investments, etc. (This document should be “durable,” meaning it remains in effect if you’re incapacitated.)
Medical Power of Attorney and Advance Directives: These allow someone to make healthcare decisions on your behalf if you’re unable, and let you outline your wishes for medical treatment (like a living will for end-of-life care preferences). It’s crucial to have these, so doctors and family know your desires regarding life support, resuscitation (DNR orders), and so forth.
Beneficiary Designations: Review all your financial accounts – IRAs, 401(k)s, life insurance, annuities, even bank accounts or CDs that have POD (payable on death) designations. These beneficiary forms override your will for those assets, so ensure they’re up-to-date. Many people list their spouse as primary and adult children as contingent beneficiaries, but you may have specific wishes. Check that your move to retirement hasn’t left any outdated names (for example, an ex-spouse from decades ago, or a deceased relative).
Trusts (if needed): Some retirees set up a living trust (revocable trust) to hold their assets, which can help bypass probate and provide privacy. If you own real estate in multiple states or have a more complex estate, a trust might be useful. Trusts can also manage how and when your heirs receive money – for instance, holding assets for young grandchildren until they reach a certain age. A common scenario: a couple might create a trust to ensure that when one spouse dies, the assets are managed for the benefit of the surviving spouse and then ultimately pass to children from a first marriage. Trusts can address these blended family situations smoothly.
Finally, as part of estate planning, think about any legacy or charitable goals. Georgetown has a strong community spirit – maybe you want to leave a gift to your church, alma mater, or a local charity. There are efficient ways to do that, such as naming a charity as a beneficiary of an IRA (which is tax-efficient, since charities don’t pay tax on it, whereas an individual heir would pay income tax on an inherited traditional IRA). Or you might set up a donor-advised fund during your lifetime. Your financial advisor can coordinate with your estate planning attorney to make sure these intentions are documented and aligned with the rest of your plan.
One of the most practical tools in retirement planning is a cash flow forecast – essentially, a long-term budget that projects your income and expenses each year in retirement. Think of it as your financial roadmap, helping ensure you won’t outlive your money. Building a detailed retirement cash flow plan is especially useful for pre-retirees in their 50s or 60s, as it can show whether you’re truly on track to retire when you want and maintain your desired lifestyle.
Start with your living expenses: How much do you expect to spend each month in retirement? This includes the basics (housing, utilities, groceries, transportation, healthcare premiums, insurance) as well as discretionary fun stuff (travel, dining out, hobbies). Be realistic and err on the side of slightly overestimating expenses – it’s better to have a cushion. Don’t forget that some costs might increase in retirement (for example, you might travel more or spoil the grandkids!). And while some expenses might decrease (you’re not commuting to work, maybe you pay off your mortgage), other new ones can pop up (like more healthcare costs or helping family members).
Account for inflation: Prices won’t stay the same over a 20- or 30-year retirement. Even moderate inflation means the purchasing power of a fixed income shrinks over time. Historically, a 2-3% annual inflation rate is common. Over 25 years, even 3% inflation would roughly double prices. So your cash flow forecast should inflate your expenses each year by an assumed rate to mirror rising costs. This is particularly important for healthcare expenses, which often rise faster than general inflation.
Map out income sources: List all your expected income streams in each year of retirement. Typically this includes Social Security (know the amount you’ll get at whatever age you plan to start it), any pensions or annuities, rental income if you have property, and then withdrawals from your investments. Some people also choose part-time work or consulting in early retirement – if that’s you, include that income for the relevant years. Essentially, for each year, you’ll have “income in” and “expenses out,” and the difference will be made up by withdrawing from your savings. A cash flow forecast will show how your investment balances might change year by year given those withdrawals and assumed growth ratesceritypartners.com.
Include big one-time expenses: Think about any large future costs. Do you plan to buy a new car every 10 years? Remodel your house at some point? Pay for a child’s wedding or help with grandkids’ college? It’s easier to accommodate these if they’re anticipated in the plan. Also, consider healthcare shocks – while you can’t know if/when a major health event will occur, you might set aside an extra emergency fund or assume some amount of long-term care expense in your late 80s as a placeholder.
When we put all this together, you’ll get a picture of whether your income covers your expenses each year and how your investment principal behaves over time. If the forecast shows a shortfall in later years, you have time to adjust – perhaps by saving more now, planning to spend a bit less, or maybe downsizing your home later to free up equity. The exercise is incredibly valuable for making informed decisions. It can also highlight when you might face tighter times.
One more thing: review and update the plan annually. Retirement planning isn’t a “one and done” deal. Life happens – you might incur different expenses, market performance will differ from assumptions, tax laws change (we’ve seen that with RMD ages and tax brackets recently), and your own goals might evolve. By revisiting your cash flow forecast each year, you can make course corrections. Maybe two years in, you find you’re spending less than expected – great, you can potentially loosen up the budget or invest more for growth. Or if you’re spending more, you might need to adjust investment strategy or cut back slightly to stay on track.
Retirement planning isn’t just about the numbers – it’s also about where you live and what kind of life you want. Let’s highlight a few Georgetown-specific factors that can influence your retirement plans:
Cost of Living: Overall, cost of living in Georgetown and the Austin metro is a bit higher than the U.S. average. The primary reason is housing costs – home prices have risen with the city’s popularity. If you’re moving from California or the Northeast, that might still seem like a bargain, but for Texas it’s on the higher side. Many retirees living in paid-off homes in Sun City or similar communities find their ongoing expenses quite manageable, especially with those homestead tax exemptions kicking in at 65.
Property Taxes & Homeowner Considerations: We covered taxes in detail, but to reiterate locally: Williamson County and the City of Georgetown do levy significant property taxes. The city’s property tax rate plus county plus school district adds up – but remember to claim your Homestead and Over-65 exemptions which will slash your tax bill significantlycommunityimpact.com. In 2022, Williamson County bumped the senior exemption to $125,000, and many area school districts also offer generous exemptions for 65+. Additionally, if you’ve lived in Texas for a while, your school taxes get frozen at age 65 and cannot increase thereafter – a very helpful provision given the rapid home value appreciation in the region. Georgetown’s home values have risen, but as a retiree you’re somewhat shielded from tax hikes. If you plan to age in place in your home, these savings are crucial to include in your budget. If instead you plan to downsize or relocate within Georgetown for retirement, weigh the pros and cons.
Retirement Communities: Georgetown is famous for its retiree-friendly communities, notably Sun City Texas. Sun City is a massive active adult (55+) community developed by Del Webb, consisting of over 10,000 homes, golf courses, fitness centers, pools, hobby studios, and clubs for every interest. Besides Sun City, Georgetown and the surrounding area have other senior living options: age-restricted neighborhoods like Heritage Oaks, independent living apartments, and assisted living facilities when needed. The large over-65 population in Georgetown means businesses and services are geared toward retireesretirable.com. From senior discounts at local restaurants to an active Georgetown Senior Center with programs and classes, you’ll find an environment that is very welcoming to retirees. When planning your retirement lifestyle, think about whether you want to be in an age-restricted community or a mixed-age neighborhood.
Healthcare Access: We touched on Medicare, but it’s worth emphasizing: Georgetown has excellent healthcare access for a city its size. You have a full-service hospital (St. David’s Georgetown) right in town, and just a short drive away in Round Rock or Cedar Park are major medical centers (like Baylor Scott & White Medical Center, Ascension Seton Williamson, etc.). Being near Austin also means access to top specialists and hospitals (like St. David’s in Austin, or even the renowned Texas Heart Hospital in Austin) if needed.
Lifestyle and Recreation: Retirement is not just about finances – it’s about enjoying life! Georgetown shines here as well. The town boasts the “Most Beautiful Town Square in Texas,” with charming shops, restaurants, and year-round events. There are wineries, golf courses, hiking and biking trails along the San Gabriel River, Lake Georgetown for fishing/boating, and cultural attractions like the Palace Theatre for live plays. The community is very engaged – expect to find clubs for everything: gardening, photography, pickleball, you name it. Plus, the city’s proximity to Austin (about 30-40 minutes) means you can easily catch a UT football game, a show at Austin’s Moody Theater, or use the Austin airport for your travels.
All things considered, Georgetown offers a mix of Texas tax advantages, a high quality of life, and a ready-made community for retirees. Planning with those in mind will help you hit the ground running when you retire here. And if you’re new to the area, working with a local advisor who knows these ins and outs can greatly smooth your transition and ensure no detail slips through the cracks.
We’ve covered a lot of ground: Social Security, Medicare, taxes, investments, estate planning, budgeting, and local perks. It’s clear that a successful retirement plan has many moving parts. If you’re feeling a bit overwhelmed, you’re not alone – and you don’t have to navigate it all by yourself. This is where partnering with a local fiduciary financial advisor can make a meaningful difference in your retirement journey.
A financial advisor can provide peace of mind and ongoing guidance. Retirement planning isn’t a one-time task – laws change, markets fluctuate, and your life circumstances can evolve. Having a knowledgeable partner means you have someone to call when you have questions or when things change.
From an investment standpoint, a fiduciary advisor will design a portfolio tailored to your retirement income needs and risk tolerance, then monitor and rebalance it for you. They’ll make sure you’re not taking too much risk, but also not being too conservative to where inflation erodes your purchasing power. And they’ll do so with transparency about fees and performance.
In conclusion, planning your retirement is about marrying the fundamentals of financial planning with the specifics of your ideal life in this community. By covering Social Security, Medicare, taxes, withdrawal strategies, investments, estate planning, and budgeting – and factoring in local knowledge on property taxes, cost of living, healthcare, and communities – you set the stage for a comfortable, secure retirement.
If you’re interested in working with a retirement planner in Georgetown, contact Axon Capital Management today by filling out the form below.
Article written by Brady Lochte, Financial Advisor at Axon Capital Management
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