In the 1940s, income planning was not what it is today. Back then, the life expectancy was only about 58 years old (ouch!) and it was commonly accepted that most would retire with a nice company pension. For those who did live to a ripe “old age,” the plan was to use Social Security to help supplement their retirement, thus providing a decent income to live on and provide for your family. However, and we don’t need to tell you this – times have changed. For the past few decades, not only have pensions been on the decline but defined contribution plans have been on the rise. This has placed more responsibility on the individual to save and invest through company sponsored retirement plans such as 401k’s, IRA’s, etc.

So now, the paycheck has stopped because you are no longer employed. Now what? Now, it’s about learning to create a sustainable retirement revenue stream using all your sources of income. In today’s economic environment where we are experiencing historically low interest rates along with high market volatility, it has never been more critical to plan well for your retirement. In order to navigate successfully through various market conditions, proper retirement income planning includes the coordination of all income sources such as savings, investments, pensions, social security, home equity, and any possible inheritances.

Today, many people are living into their 80’s and 90’s which means they are enjoying 20 to 30 years or more in retirement. We not only want to help you realize your retirement income goals, but we will also help you understand how much money you will need in order to live the lifestyle you envision. The goal is to develop a retirement plan that is able to generate the income you need in a reliable and sustainable manner.

Income planning takes many things into consideration, but ultimately it’s about having enough to live on without going broke.

In developing your income planning strategy, we work backwards, in a sense, starting by figuring out how much money you will need to retire, and then determining how much you can withdraw on a monthly basis.

When you total up what you are expecting from a pension (if you have one) and social security benefits, there may be a gap in your income needs. The next part of this is having a plan to create a sustainable income stream from the savings and investments that you have worked so hard to accumulate over the years.

We look at solutions that include more traditional portfolio strategies along with solutions using annuities with guaranteed income riders. Some people get confused and will say “fixed annuity products are bad investments,” when in actuality, annuities aren’t investments at all – they are insurance products. Similar to how a pension and Social Security will pay you an income stream you can’t outlive, an annuity can do the same thing. An annuity can help remove longevity risk and sequence of returns risk. Also, by using just a portion of your investment dollars to purchase the annuity, it lets the rest of your investments continue to grow.

Typically, we combine several strategies together, which can give you a much better chance at maintaining a sustainable income, no matter how long you live.

Consider deferring your social security benefits

Income planning requires some careful decision making to assure that you reach your financial targets. Here are some points to consider:

Think about deferring your social security benefits. The average person’s social security benefit is about $1200 per month. Deferring your social security benefits for even a couple of years, or deciding to continue working those extra years will have far more impact on your social security income than if you were to increase your savings by 3-5% in the five years prior to your retirement.

How Milestone Wealth can help

Our client’s needs and financial goals are as individual as they are. As a result, the retirement strategies that we develop will always be tailored to your unique circumstances and will grow with you throughout your retirement.

If you are concerned about not having enough money to last through your retirement, we are here to answer all of your questions.

Some of the ways we can help include:

  • Helping you decide when to retire
  • Identifying risks in your portfolio
  • Help you get the most out of your IRA or 401(k)
  • Consolidate your IRA accounts
  • Explain the ins and outs of a Roth IRA conversion
  • Create an income stream that lasts through retirement
  • Make sure you have enough life insurance
  • Explore the benefits of long-term care insurance
  • Leave your legacy in a tax-efficient manner
  • Help you decide when you should claim Social Security

Our goal is to help our clients develop a retirement roadmap that can guide them toward their goals.

Call today, or fill out our contact form and we will be in touch very soon.

Questions? Call Us Today!