Retirement Income Planning

Your Wealth: Financial Strategies for a Longer Life

With life expectancies increasing, outliving one’s savings is a significant concern. Annuities, especially those offering lifetime income options, play a critical role in mitigating this risk by ensuring that individuals have a consistent income stream throughout their retirement years.

In an era where medical advancements and healthier lifestyles are pushing life expectancies ever higher, the challenge of ensuring that your wealth lasts as long as you do has become increasingly critical. For many, the solution lies in a financial instrument that is both ancient and misunderstood: the annuity.

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Is Dave Ramsey Right or Wrong on His 8% Retirement Withdrawal Rate?

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Dave Ramsey is well known in the personal finance space, but at times he gives bad money advice. Sometimes his financial advice is, frankly, out of touch with reality. Such was the case on one of his November 2023 broadcasts, when he served up some bad math on retirement withdrawal rates that would virtually guarantee people will run out of money.

During the show, Dave Ramsey said that retirees could safely withdraw 8% from their portfolios each year and never touch their principal. That is assuming that you see 12% returns per year, have 100% of your assets invested in “good mutual funds,” and keep 4% in your portfolio for inflation. Inflation has averaged 4% for the last 80 years, according to Ramsey.

Apart from unrealistic numbers, the real downside is how Ramsey completely overlooks the danger of sequence of returns risk. What is sequence of returns risk? It’s the possibility of suffering investment losses during a crucial period: in the years just before or in early retirement.

During retirement, you will count on your assets to generate income for you. Average returns don’t matter, but rather the order of your returns. If your assets take a hit in the time just before or early into when you are retired, your window for recovery isn’t what it was during your working years.

Even worse, what if you are withdrawing money during a down year? Your investments will have compounding losses – whatever initial drop they had, snowballed by the money you took out of your account.

In this article, we will go over why Dave Ramsey is completely wrong on his 8% withdrawal rate rule – and why other retirement withdrawal rates, and withdrawal strategies for that matter, might be worth a look for lasting financial security.

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Common Financial Issues for Surviving Spouses

common financial issue for surviving spouses

Surviving spouses have a lot to deal with when their significant other passes away. There is much emotional grief. Many financial and life issues arise, requiring their attention. All of this can be even more burdensome in times when economic uncertainty is strong.   

For many people in retirement, this situation applies now. The cost of living is going up. Healthcare costs are often an ever-growing area of spending for many retirees, as their need for healthcare usually increases in later years. What’s more, surviving spouses are often left in a harder situation, as their expenses may not go down proportionately with their incomes.

Here we will look at some of the issues that surviving spouses can expect to face after their spouse is gone.

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Guaranteed Retirement Income: How to Secure More Confidence for Your Financial Future

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If retirement is looming on your horizon, you are probably wondering if you will have enough money to last you through the rest of your life. A secure guaranteed income stream can bring some peace of mind, but where exactly can you put one in place? After all, Social Security will provide some benefits, but will it be enough?

The good news is that even if you feel that you could have saved more money than what you have, there are still options for securing a guaranteed retirement income. Let’s take a deeper dive into what some of those options might look like, and what they can do for you.

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What Retirement Expenses Are You Most Likely to Face?

What Retirement Expenses Are You Most Likely to Face?

When planning for retirement income, the devil is in the details. Once you are retired, you want to be sure that you have more than enough income for your lifestyle expectations.

One way to get a good grip on this is by mapping and estimating what you expect your future spending to be.

This can give you a high-level perspective of how much income you will need for your idea of a comfortable retirement. Everyone has a different situation. Because of that, the amount of annual income that you will need will likely differ from others.

That being said, you can still have more clarity in your income planning and decisions by seeing what others’ financial experiences are in retirement. One helpful metric in this regard is understanding which expenses can dominate your retirement spending.

Here are four expenses that can take a bundle out of your retirement money if you don’t plan for them. Having strategies for these costs, and your overall expenses, can go a long way toward keeping your retirement goals on track. Read More

How Will You Draw Income in Retirement?

Whether you bring home a paycheck or earn your keep from entrepreneurship, everyone has some primary income sources during their career. But things change in retirement.

Some folks continue to work in some fashion, often for their own enjoyment. However, chances are you won’t count on this same income source in the way that you did during your career. You may well have to find a way to replace this income with other income streams.

This brings up a big question: How will you draw income for your retirement spending needs?

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How to Spend More Money in Retirement

How to Spend More Money in Retirement

An endless parade of financial articles talks about saving enough for retirement and minding your retirement budget. But what about having more than enough money for your lifestyle goals? Just accumulating sufficient savings to last through your entire retirement is only part of the picture.

Decumulation, the Final (Retirement) Frontier

“The decumulation of assets in retirement is obviously a much more complex problem than accumulating assets before retirement,” said Emmanuel Roman, CEO of PIMCO, in an interview with Advisor Perspectives. He continued:

“Because of its complexity, decumulation is unlikely to be solved with a single solution; we’re going to need to combine a number of good ideas from different corners of the industry to solve this problem. To make a significant difference, one should start with an important problem. A big one is how to protect retirees from sequence-of-returns risk, or the risk related to the timing of retirement.” Read More

How Can the Timing of Your Retirement Withdrawals Affect Your Income?

How Can the Timing of Your Retirement Withdrawals Affect Your Income?

Sequence risk is the risk that you will take a big loss early on in the life of an investment portfolio. It’s already bad when you have investment losses at the early start of your retirement. It’s equally bad when you take losses just before you retire.

But if you are retired and taking withdrawals when the portfolio losses happen, the impact of those losses is compounded. By taking a withdrawal, you are already drawing down the balance of money in your portfolio from what it was prior.

If your portfolio also sustains a loss at the same time, the effects of both will come together to affect you. You will not only have to eat the loss, but you will further deplete the balance in your portfolio. So the timing of your withdrawals matters, especially in relation to how your portfolio performs. Read More

6 Tips on How to Maximize Your Income in Retirement

6 Tips on How to Maximize Your Income in Retirement

Paying the bills after you retire is quite different from during your career. After all, the income you receive will come from a variety of sources, as opposed as to earned income or a bimonthly paycheck.

Social Security, your own investment portfolio, a pension (if you are lucky), and maybe even part-time work can be sources of income that help pay for your retirement lifestyle.

The trick is therefore to maximize the total amount of income that you receive. But many Americans worry that they won’t have enough income during retirement to meet their needs.

The Alliance for Lifetime Income conducted a survey of 3,119 adults regarding their financial readiness for retirement. Eight in 10 (80%) of them expressed at least some level of concern that they won’t have enough income after they retire.

The survey revealed that 18% of the respondents were extremely worried about this. Meanwhile, 26% were “moderately” concerned and 36% were “somewhat” concerned about this issue.

Here are six key steps you can take now to avoid these concerns and maximize your income. You don’t have to wait until you are retired to start planning out the rest of your life. Read More

Retirement Income Plan? Here’s Why You Need One for Your Retirement

Retirement Income Plan? Here's Why You Need One for Your Retirement

When you are still working, a rock-solid financial plan will do wonders for helping you accumulate money for retirement. This strategy will laser-focus on growth and accumulation as top goals. With a financial advisor’s help, you could stay on track with your plan and gradually build your savings for later years.

But things change as you near retirement. This period is called the ‘retirement red zone‘ for a reason. It’s a time when new planning is needed. Your financial plan will need to change gears, in some ways, in its focus from growth to retirement income.

This can be tricky in some cases, as today we face different challenges in retirement than those before us did. Longer living is one such issue now.

It’s a very real concern for many retirees, as one study by Allianz Life found. In the study, six in 10 retirees ranked running out of money while they are still living as a greater fear than death itself.

Just like the plan for growing your money during your career, an income plan can help you maximize your lifetime cash-flow. In turn, you can better enjoy the hard-earned fruits of your lifetime of work.

Many years of hard work brought you to this point. Now it’s time for your money to work and let you enjoy a comfortable, lasting lifestyle. Read More

Next Steps to Consider

  • Start a Conversation About Your Retirement What-Ifs

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    Start a Conversation About Your Retirement What-Ifs

    Already working with someone or thinking about getting help? Ask us about what is on your mind. Learn More

  • What Independent Guidance
    Does for You

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    What Independent Guidance
    Does for You

    See how the crucial differences between independent and captive financial professionals add up. Learn More

  • Stories from Others
    Just Like You

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    Stories from Others
    Just Like You

    Hear from others who had financial challenges, were looking for answers, and how we helped them find solutions. Learn More

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