We believe that the number one issue in retirement is creating income. In retirement, having enough money to live on every month without working, and without running out during your lifetime, is the most important goal, in our opinion.
With longevity increasing and people living longer lives, running out of money is what retirees are most afraid of–they fear running out of money more than they do dying! (Transamerica Center for Retirement Studies)
How Do You Determine How Much You Will Need?
To develop a realistic retirement budget, begin by examining the amount of money that you are currently spending and add a cushion to that. Even if you think you will spend less, most often when you aren’t working, you’re going to have more time on your hands, and probably more desire to go out and enjoy restaurants, excursions, and travel.
Distribution Planning in Retirement
Deciding when you have enough money to retire requires analyzing your current retirement portfolio and designing a retirement income plan that distributes your assets in a methodical manner, using sound retirement planning principles.
When you retire, you’re no longer working and earning a salary, stockpiling savings every
month towards your retirement. Instead, you’re dipping into your retirement accounts to take out money to live on. That’s why retirement income planning is so important. We use math.
Don’t guess. You don’t want to take too much out, but you need to live, and you need to minimize your taxation as much as possible.
Working with a qualified retirement planner, you could create a retirement distribution plan that takes into account all of your assets and income sources. Social Security benefits, dividends, pensions, interest income, rental real estate, and more, need to be tallied and compared against your monthly expenses and potential income taxes due.
You’ll also want to address your estate, your legacy and put other protections like Trusts and/or long-term-care provisions in place for your family.
Don’t leave your retirement to chance. Put a solid retirement income plan in place.
Original source material courtesy of Decker Retirement Planning, Inc.