Retirement Income Planning
Retirement Income Planning
What does the word "retirement" mean? Sitting on the porch? Fishing with
grandchildren? Starting a business, or rolling up sleeves and getting
involved with a favorite philanthropy, or, perhaps, to travel the world?
Retirement today is better. People live longer, and are more happy and
healty in retirement years. On the financial side, however, trends are not
as positive. For a combination of reasons, the goal of a financially secure
retirement is increasingly difficult to achieve.
A 20-, 30-, or even a 40- year retirement is not out of the question.
A longer and more active retirement requires greater financial resources.
Underestimating retirement needs now can put a crimp on future
retirement lifestyle. Basing a financial plan on a projected retirement span
that is too short can strain future resources.
People used to rely on Social Security benefits to see them through
retirement. Not now! Social Security will not support many retirement
dreams. At best, Social Security is a safety net.
These days, fewer companies provide pension plans for their employees,
and people change jobs more often, making less likely qualification for a
significant employer pension. Without a pension, what do we do? The
answer is up to you.
How much income will you need when you retire? A financial planning rule
of thumb is to project 70% to 80% of pre-retirement income. Some day-to-
day living expenses will be less in retirement, such as work-related
clothing and commuting expenses. The mortgage might be paid off. Other
expenses, such as medical costs and leisure-time travel, might be higher in
retirement. You might need upwards of 120% of pre-retirement income.
The income you want to replace is the income you will earn at the time you
retire, not the amount you earn now. After you have projected retirement
income needs and decided what methods you will use to build retirement
savings, you must determine how you will invest to reach your goals. The
amount of money you will have at retirement depends on three factors:
Even if retirement is on the immediate horizon, you want to make sure
that savings grow faster than inflation. This is why many advisors
recommend stocks in retirement portfolios. Over time, stocks have had the
best record of producing returns greater than inflation.
On the other hand, some retirees do not want the risk of stocks. In that
case, a ladder of fixed-income securities will do the job.
Retirement income planning is our expertise. Contact us. We can help!
What does the word "retirement" mean? Sitting on the porch? Fishing with
grandchildren? Starting a business, or rolling up sleeves and getting
involved with a favorite philanthropy, or, perhaps, to travel the world?
Retirement today is better. People live longer, and are more happy and
healty in retirement years. On the financial side, however, trends are not
as positive. For a combination of reasons, the goal of a financially secure
retirement is increasingly difficult to achieve.
A 20-, 30-, or even a 40- year retirement is not out of the question.
A longer and more active retirement requires greater financial resources.
Underestimating retirement needs now can put a crimp on future
retirement lifestyle. Basing a financial plan on a projected retirement span
that is too short can strain future resources.
People used to rely on Social Security benefits to see them through
retirement. Not now! Social Security will not support many retirement
dreams. At best, Social Security is a safety net.
These days, fewer companies provide pension plans for their employees,
and people change jobs more often, making less likely qualification for a
significant employer pension. Without a pension, what do we do? The
answer is up to you.
How much income will you need when you retire? A financial planning rule
of thumb is to project 70% to 80% of pre-retirement income. Some day-to-
day living expenses will be less in retirement, such as work-related
clothing and commuting expenses. The mortgage might be paid off. Other
expenses, such as medical costs and leisure-time travel, might be higher in
retirement. You might need upwards of 120% of pre-retirement income.
The income you want to replace is the income you will earn at the time you
retire, not the amount you earn now. After you have projected retirement
income needs and decided what methods you will use to build retirement
savings, you must determine how you will invest to reach your goals. The
amount of money you will have at retirement depends on three factors:
- How much you save each year
- How long you save
- How you invest your savings
Even if retirement is on the immediate horizon, you want to make sure
that savings grow faster than inflation. This is why many advisors
recommend stocks in retirement portfolios. Over time, stocks have had the
best record of producing returns greater than inflation.
On the other hand, some retirees do not want the risk of stocks. In that
case, a ladder of fixed-income securities will do the job.
Retirement income planning is our expertise. Contact us. We can help!
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Wealth Planning & Management, LLC.
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