Retirement Planning or (Holistic) “RETIREMENT INCOME” Planning…
What’s the ultimate goal for any/all long-term savings & investing, to accumulate wealth? To grow your pile of money to the biggest possible? To get to the “top of the mountain” so that you can retire comfortably one day? That all makes perfect sense to me. So let me ask you a question…how does it work when you finally get there? You know, when you reach retirement age – 65, 67, or even 70+ and the day your earned income stops. What is the plan for converting your accumulated assets into income? What kind of lifestyle will you be able to have and afford? If you aren’t 100% crystal clear on how that truly looks or works then do you think it may be a good idea to gain some clarity around that piece of life’s journey/puzzle? If that’s the case, when would be the best time to discover the financial future and “lifestyle” you are currently setting yourself up to have? Of course (emotionally) you don’t want to go there, I get it. Who wants to even think about being 65+ years-old? But you most likely will get there, this I can assure you. I would think NOW would be the best time to begin to figure that vital part of the equation out and not suddenly wake up at 65 to face reality then.
Why does anybody sacrifice spending and enjoying all of their (hard-earned) money during their working years?
The ultimate reason for any long-term retirement savings is that you will want an “income-stream” at some point in the future. The highest possible ongoing stream of income, and one that you won’t outlive. The problem is where do you put your money to provide you with the greatest level of income, and without the risk and fear of losing principal and running out of resources before you and (if married) your spouse’ s journey ends (let alone leaving a legacy).
If you remain invested only, subject to the swings and volatility of the financial markets, the general rule of thumb for preservation of capital has been a 4% “safe withdrawal rate”. That you can safely take 4% annually from your invested assets. More recently, many financial experts have been reporting that 4% may be too aggressive of a percentage and that 3% would be a safer bet. Either way, you are looking at income of only $30,000-$40,000 for each $1,000,000 of wealth accumulated. You will need to have saved several million dollars to yield around $100,000 if you are planning to stay invested in a 50/50 portfolio of equities and bonds. Is this what you are currently setting yourself up for?
If it were possible, using the same dollars and current cash-flow as you are presently, to be better structured to increase the allowable withdrawal rate to say 7%, or possibly higher, and do so without taking on any additional risk, I’m guessing that you would want to at least know how this can be achieved? The end result being that the same $1,000,000 generates a $70,000 annual income stream, and with more assurance of achieving it than you otherwise could or would.
This is achieved by combining the investment only power with Actuarial Science. Not an either/or but a balance of both “at risk” investments combined with the world of guarantees (insured products), to yield a much more efficient and profoundly effective long-term result. Sounds too good to be true, right?
NOT AN EITHER/OR…
Please note, I have been transacting in both worlds, investments and insurance/risk-transfer products, for over 30-years. What I know to be true is that only a very small percentage of the insurance licensed professionals hold a securities license as well and visa versa. The vast majority of the “financial advisors” out there are primarily asset/money managers, and they do not deal with, utilize, know or truly understand the insurance world comprised of guaranteed products, such as life insurance and annuities. They operate in the risk/reward and wealth accumulation space which is very important indeed. However, that’s their only focus…invest more and trying to get you better rates of return. They are typically compensated by charging and earning a fee on the size of their entire block of assets under management (AUM). They get paid whether the market goes up or the market is going down, whether you are making money or not. So to increase their personal income they have to get more AUM, and hope the market goes up too. I’m not saying that it’s good or bad, it’s just the way it is. So the typical advisor who doesn’t understand the world of guaranteed products, and certainly doesn’t know or understand “Actuarial Science” and how the two economic powers when combined in the proper ratios can yield drastically enhanced benefits, including higher income (some guaranteed), lower risk, tax savings, added liquidity, and increased legacy possibilities.
What does this all mean? This all equates to YOU having a much nicer lifestyle during your later years, with added peace of mind as you make your journey down the mountain…
If you don’t have a clear picture today of what your future retirement income stream is looking like tomorrow – “will my family be ok?”, and if you are truly open to discussions about income planning strategies that will yield you maximum retirement income and better Financial Balance® that incorporates “safety-nets” to better assure you of having it, then let’s talk. You will learn more and get to see the BIG picture today, so that you can take proper action steps NOW and find out how this is accomplished. I invite you to go down this path of discovery with me and I strongly recommend you act on it soon, as waiting any longer only decreases the net effect and reduces your options later. What do you have to lose and/or gain…(a lot!)