Two crushing handicaps for people who enter retirement are a lack of income and a lack of cash. Overcoming the lack of income begins with Income Planning. More than ever before, retirees are dependent upon their investments to generate retirement income. Income Planning is an essential part of retirement, but is often times set aside due to other life priorities. Most people consider contributing to their 401(k) plan all the “income planning” they need. Planning for your income in retirement requires much more attention than it receives and should be addressed early in your career. Typically, retirees are told they should plan to retire with at least 60-70% of their pre-retirement income; however most retirees know they really need about 100% of their pre-retirement income to stay comfortable. There are different sources to consider when developing a retirement plan such as social security, defined benefit pensions, VA pensions, 401(k) plans and IRA’s and investments and savings.
Retirement Income planning (the orderly and strategically timed distribution of assets in retirement) begins where the accumulation of assets ends. One of the most difficult things for people to change is their mindset when moving from an accumulation phase to a distribution phase when they start thinking about retiring. Many people continue to hold on to the idea that how much they earn on their money is most important, and it is, if you are young and working and still accumulating assets for retirement.
However, what you earn on your money is secondary and much less important when you enter retirement. What is important is the safety, security and the preservation of the very assets that will generate your income streams for hopefully 30 or 40 years of retirement!
If you lose what you have, it cannot generate an income check for you every month and you may find yourself extending your working life or worse yet, looking for a job in your retirement years.
Income Planning is best when we work toward a strategy that allocates assets in a manner that places a heavy emphasis on safe and secure streams of income that continue over long periods of time. This is extremely important because Americans are increasingly being forced to rely upon their own retirement savings to create the retirement income they will need. With longevity increasing and interest rates low, creating durable streams of retirement income can be challenging. There are no take backs in poor retirement planning.
Retirement Income planning (the orderly and strategically timed distribution of assets in retirement) begins where the accumulation of assets ends. One of the most difficult things for people to change is their mindset when moving from an accumulation phase to a distribution phase when they start thinking about retiring. Many people continue to hold on to the idea that how much they earn on their money is most important, and it is, if you are young and working and still accumulating assets for retirement.
However, what you earn on your money is secondary and much less important when you enter retirement. What is important is the safety, security and the preservation of the very assets that will generate your income streams for hopefully 30 or 40 years of retirement!
If you lose what you have, it cannot generate an income check for you every month and you may find yourself extending your working life or worse yet, looking for a job in your retirement years.
Income Planning is best when we work toward a strategy that allocates assets in a manner that places a heavy emphasis on safe and secure streams of income that continue over long periods of time. This is extremely important because Americans are increasingly being forced to rely upon their own retirement savings to create the retirement income they will need. With longevity increasing and interest rates low, creating durable streams of retirement income can be challenging. There are no take backs in poor retirement planning.