Retirement Income Planning for Financial Security and a Dignified RetirementSubmitted by Ascend Planning & Consulting LLC. on August 20th, 2018
It’s not just about the hike up the mountain. The most dangerous time on Mt. Everest is the journey down, not the ascent to the summit. Similarly, for most people, the “decumulation” phase of retirement planning can be more dangerous to a successful retirement than the accumulation of retirement assets.
What is Retirement Income Planning and Why is it so Important?
As retirement approaches, our conversations start to change from saving for retirement to income planning. In other words, how do you plan on replacing the paycheck from employment activities with a stable paycheck from your years of savings and make it last for 30 years or more?
The stakes are high—failure means running out of money at an older age when it is too late to do much about it. At 50, 60, or even 70 there are many options for a financially secure future.
Even if you have done a terrific job of building wealth on your own, you may find yourself in unfamiliar pre-retirement territory, unsure how to prudently use your resources. After all, this may be your first time that you are considering retirement income strategies.
Lifestyle Retirement Decisions.
How do you plan on replacing the sense of purpose or recognition you felt while working? If you’re planning on working in retirement, what will that look like?
Are there activities and values that are important to you and how can you ensure your family carries on your legacy?
Will you stay in your home or downsize or move? If you decide to move, will the motivation be climate, lifestyle, health or financial?
Financial Retirement Decisions.
Which combination of withdrawals from tax-deferred, tax-free or taxable accounts is best for your particular situation and what is a sustainable withdrawal rate from your portfolio?
When should you claim Social Security benefits, which pension distribution option is most favorable and how are you planning on covering health care expenses?
How you can fund other goals such as leaving a legacy for your family or charitable organizations?
Risks in Retirement.
You shouldn’t live in constant fear of retirement risks. Many of them can be addressed with proactive and ongoing planning.
What if retirement happens earlier than you’d hoped or you live longer than expected?
What if the stock market has a sustained down period in the first few years of retirement or inflation threatens to erode your purchasing power?
Tax increases, both federal and local or changes to Medicare or Social Security may have a direct impact on your spendable income too.
Do you have a written plan to delegate financial or health care decisions if you’re unable?
These are several of the decision points that one needs to address as they approach and enter retirement. If you haven’t thought these through, now may be the time.
For an analysis of your Retirement Income Plan, contact Ascend Planning & Consulting, LLC today.